Lower Costs, More Cures Act of 2021
This bill establishes and modifies several programs and requirements to address prescription drug prices.
The bill modifies provisions under Medicare and Medicaid relating to prescription drug coverage and price transparency. Among other changes, the bill
The bill also generally modifies other provisions relating to the regulation and costs of generic and brand-name drugs. Among other changes, the bill
To provide for certain reforms with respect to the Medicare program 
  under title XVIII of the Social Security Act, the Medicaid program 
under title XIX of such Act, the Food and Drug Administration, 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 ``Lower Costs, More Cures Act of 
2021''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                    TITLE I--MEDICARE PARTS B AND D

                 Subtitle A--Medicare Part B Provisions

Sec. 101. Improvements to Medicare site-of-service transparency.
Sec. 102. Requiring manufacturers of certain single-dose container or 
                            single-use package drugs payable under part 
                            B of the Medicare program to provide 
                            refunds with respect to discarded amounts 
                            of such drugs.
Sec. 103. Providing for variation in payment for certain drugs covered 
                            under part B of the Medicare program.
Sec. 104. Establishment of maximum add-on payment for drugs and 
                            biologicals.
Sec. 105. Treatment of drug administration services furnished by 
                            certain excepted off-campus outpatient 
                            departments of a provider.
                  Subtitle B--Drug Price Transparency

Sec. 111. Reporting on explanation for drug price increases.
Sec. 112. Public disclosure of drug discounts.
Sec. 113. Study of pharmaceutical supply chain intermediaries and 
                            merger activity.
Sec. 114. Making prescription drug marketing sample information 
                            reported by manufacturers available to 
                            certain individuals and entities.
Sec. 115. Sense of Congress regarding the need to expand commercially 
                            available drug pricing comparison 
                            platforms.
              Subtitle C--Medicare Part D Benefit Redesign

Sec. 121. Medicare part D benefit redesign.
              Subtitle D--Other Medicare Part D Provisions

Sec. 131. Allowing the offering of additional prescription drug plans 
                            under Medicare part D.
Sec. 132. Allowing certain enrollees of prescription drug plans and MA-
                            PD plans under Medicare program to spread 
                            out cost-sharing under certain 
                            circumstances.
Sec. 133. Establishing a monthly cap on beneficiary incurred costs for 
                            insulin products and supplies under a 
                            prescription drug plan or MA-PD plan.
Sec. 134. Growth rate of Medicare part D out-of-pocket cost threshold.
                           TITLE II--MEDICAID

Sec. 201. Medicaid pharmacy and therapeutics committee improvements.
Sec. 202. GAO report on conflicts of interest in State Medicaid program 
                            drug use review boards and pharmacy and 
                            therapeutics (P&T) committees.
Sec. 203. Ensuring the accuracy of manufacturer price and drug product 
                            information under the Medicaid drug rebate 
                            program.
Sec. 204. Improving transparency and preventing the use of abusive 
                            spread pricing and related practices in 
                            Medicaid.
Sec. 205. T-MSIS drug data analytics reports.
Sec. 206. Risk-sharing value-based payment agreements for covered 
                            outpatient drugs under Medicaid.
Sec. 207. Applying Medicaid drug rebate requirement to drugs provided 
                            as part of outpatient hospital services.
                TITLE III--FOOD AND DRUG ADMINISTRATION

                       Subtitle A--Pay-for-Delay

Sec. 301. Unlawful agreements.
Sec. 302. Notice and certification of agreements.
Sec. 303. Forfeiture of 180-day exclusivity period.
Sec. 304. Commission litigation authority.
Sec. 305. Statute of limitations.
             Subtitle B--Advancing Education on Biosimilars

Sec. 321. Education on biological products.
                      Subtitle C--Other Provisions

Sec. 331. Clarifying the meaning of new chemical entity.
                      TITLE IV--REVENUE PROVISION

Sec. 401. Safe harbor for high deductible health plans without 
                            deductible for insulin.
                         TITLE V--MISCELLANEOUS

Sec. 501. Payment for biosimilar biological products during initial 
                            period.
Sec. 502. GAO study and report on average sales price.
Sec. 503. Requiring prescription drug plans and MA-PD plans to report 
                            potential fraud, waste, and abuse to the 
                            Secretary of HHS.
Sec. 504. Establishment of pharmacy quality measures under Medicare 
                            part D.
Sec. 505. Improving coordination between the Food and Drug 
                            Administration and the Centers for Medicare 
                            & Medicaid Services.
Sec. 506. Patient consultation in Medicare national and local coverage 
                            determinations in order to mitigate 
                            barriers to inclusion of such perspectives.
Sec. 507. MedPAC report on shifting coverage of certain Medicare part B 
                            drugs to Medicare part D.
Sec. 508. Requirement that direct-to-consumer advertisements for 
                            prescription drugs and biological products 
                            include truthful and non-misleading pricing 
                            information.
Sec. 509. Chief Pharmaceutical Negotiator at the Office of the United 
                            States Trade Representative.

                    TITLE I--MEDICARE PARTS B AND D

                 Subtitle A--Medicare Part B Provisions

SEC. 101. IMPROVEMENTS TO MEDICARE SITE-OF-SERVICE TRANSPARENCY.

    Section 1834(t) of the Social Security Act (42 U.S.C. 1395m(t)) is 
amended--
            (1) in paragraph (1)--
                    (A) in the heading, by striking ``In general'' and 
                inserting ``Site payment'';
                    (B) in the matter preceding subparagraph (A)--
                            (i) by striking ``or to'' and inserting ``, 
                        to'';
                            (ii) by inserting ``, or to a physician for 
                        services furnished in a physician's office'' 
                        after ``surgical center''; and
                            (iii) by inserting ``(or 2022 with respect 
                        to a physician for services furnished in a 
                        physician's office)'' after ``2018''; and
                    (C) in subparagraph (A)--
                            (i) by striking ``and the'' and inserting 
                        ``, the''; and
                            (ii) by inserting ``, and the physician fee 
                        schedule under section 1848 (with respect to 
                        the practice expense component of such payment 
                        amount)'' after ``such section'';
            (2) by redesignating paragraphs (2) through (4) as 
        paragraphs (3) through (5), respectively; and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Physician payment.--Beginning in 2022, the Secretary 
        shall expand the information included on the Internet website 
        described in paragraph (1) to include--
                    ``(A) the amount paid to a physician under section 
                1848 for an item or service for the settings described 
                in paragraph (1); and
                    ``(B) the estimated amount of beneficiary liability 
                applicable to the item or service.''.

SEC. 102. REQUIRING MANUFACTURERS OF CERTAIN SINGLE-DOSE CONTAINER OR 
              SINGLE-USE PACKAGE DRUGS PAYABLE UNDER PART B OF THE 
              MEDICARE PROGRAM TO PROVIDE REFUNDS WITH RESPECT TO 
              DISCARDED AMOUNTS OF SUCH DRUGS.

    Section 1847A of the Social Security Act (42 U.S.C. 1395w-3a) is 
amended by adding at the end the following new subsection:
    ``(i) Refund for Certain Discarded Single-Dose Container or Single-
Use Package Drugs.--
            ``(1) Secretarial provision of information.--
                    ``(A) In general.--For each calendar quarter 
                beginning on or after January 1, 2022, the Secretary 
                shall, with respect to a refundable single-dose 
                container or single-use package drug (as defined in 
                paragraph (8)), report to each manufacturer (as defined 
                in subsection (c)(6)(A)) of such refundable single-dose 
                container or single-use package drug the following for 
                the calendar quarter:
                            ``(i) Subject to subparagraph (C), 
                        information on the total number of units of the 
                        billing and payment code of such drug, if any, 
                        that were discarded during such quarter, as 
                        determined using a mechanism such as the JW 
                        modifier used as of the date of enactment of 
                        this subsection (or any such successor modifier 
                        that includes such data as determined 
                        appropriate by the Secretary).
                            ``(ii) The refund amount that the 
                        manufacturer is liable for pursuant to 
                        paragraph (3).
                    ``(B) Determination of discarded amounts.--For 
                purposes of subparagraph (A)(i), with respect to a 
                refundable single-dose container or single-use package 
                drug furnished during a quarter, the amount of such 
                drug that was discarded shall be determined based on 
                the amount of such drug that was unused and discarded 
                for each drug on the date of service.
                    ``(C) Exclusion of units of packaged drugs.--The 
                total number of units of the billing and payment code 
                of a refundable single-dose container or single-use 
                package drug of a manufacturer furnished during a 
                calendar quarter for purposes of subparagraph (A)(i), 
                and the determination of the estimated total allowed 
                charges for the drug in the quarter for purposes of 
                paragraph (3)(A)(ii), shall not include such units that 
                are packaged into the payment amount for an item or 
                service and are not separately payable.
            ``(2) Manufacturer requirement.--For each calendar quarter 
        beginning on or after January 1, 2022, the manufacturer of a 
        refundable single-dose container or single-use package drug 
        shall, for such drug, provide to the Secretary a refund that is 
        equal to the amount specified in paragraph (3) for such drug 
        for such quarter.
            ``(3) Refund amount.--
                    ``(A) In general.--The amount of the refund 
                specified in this paragraph is, with respect to a 
                refundable single-dose container or single-use package 
                drug of a manufacturer assigned to a billing and 
                payment code for a calendar quarter beginning on or 
                after January 1, 2022, an amount equal to the estimated 
                amount (if any) by which--
                            ``(i) the product of--
                                    ``(I) the total number of units of 
                                the billing and payment code for such 
                                drug that were discarded during such 
                                quarter (as determined under paragraph 
                                (1)); and
                                    ``(II)(aa) in the case of a 
                                refundable single-dose container or 
                                single-use package drug that is a 
                                single source drug or biological, the 
                                amount of payment determined for such 
                                drug or biological under subsection 
                                (b)(1)(B) for such quarter; or
                                    ``(bb) in the case of a refundable 
                                single-dose container or single-use 
                                package drug that is a biosimilar 
                                biological product, the amount of 
                                payment determined for such product 
                                under subsection (b)(1)(C) for such 
                                quarter; exceeds
                            ``(ii) an amount equal to the applicable 
                        percentage (as defined in subparagraph (B)) of 
                        the estimated total allowed charges for such 
                        drug under this part during the quarter.
                    ``(B) Applicable percentage defined.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(ii), the term `applicable 
                        percentage' means--
                                    ``(I) subject to subclause (II), 10 
                                percent; and
                                    ``(II) if applicable, in the case 
                                of a refundable single-dose container 
                                or single-use package drug described in 
                                clause (ii), a percentage specified by 
                                the Secretary pursuant to such clause.
                            ``(ii) Treatment of drugs that have unique 
                        circumstances.--In the case of a refundable 
                        single-dose container or single-use package 
                        drug that has unique circumstances involving 
                        similar loss of product as that described in 
                        paragraph (8)(B)(ii), the Secretary, through 
                        notice and comment rulemaking, may increase the 
                        applicable percentage otherwise applicable 
                        under clause (i)(I) as determined appropriate 
                        by the Secretary.
            ``(4) Frequency.--Amounts required to be refunded pursuant 
        to paragraph (2) shall be paid in regular intervals (as 
        determined appropriate by the Secretary).
            ``(5) Refund deposits.--Amounts paid as refunds pursuant to 
        paragraph (2) shall be deposited into the Federal Supplementary 
        Medical Insurance Trust Fund established under section 1841.
            ``(6) Enforcement.--
                    ``(A) Audits.--
                            ``(i) Manufacturer audits.--Each 
                        manufacturer of a refundable single-dose 
                        container or single-use package drug that is 
                        required to provide a refund under this 
                        subsection shall be subject to periodic audit 
                        with respect to such drug and such refunds by 
                        the Secretary.
                            ``(ii) Provider audits.--The Secretary 
                        shall conduct periodic audits of claims 
                        submitted under this part with respect to 
                        refundable single-dose container or single-use 
                        package drugs in accordance with the authority 
                        under section 1833(e) to ensure compliance with 
                        the requirements applicable under this 
                        subsection.
                    ``(B) Civil money penalty.--
                            ``(i) In general.--The Secretary shall 
                        impose a civil money penalty on a manufacturer 
                        of a refundable single-dose container or 
                        single-use package drug who has failed to 
                        comply with the requirement under paragraph (2) 
                        for such drug for a calendar quarter in an 
                        amount equal to the sum of--
                                    ``(I) the amount that the 
                                manufacturer would have paid under such 
                                paragraph with respect to such drug for 
                                such quarter; and
                                    ``(II) 25 percent of such amount.
                            ``(ii) Application.--The provisions of 
                        section 1128A (other than subsections (a) and 
                        (b)) shall apply to a civil money penalty under 
                        this subparagraph in the same manner as such 
                        provisions apply to a penalty or proceeding 
                        under section 1128A(a).
            ``(7) Implementation.--The Secretary shall implement this 
        subsection through notice and comment rulemaking.
            ``(8) Definition of refundable single-dose container or 
        single-use package drug.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this subsection, the term 
                `refundable single-dose container or single-use package 
                drug' means a single source drug or biological (as 
                defined in section 1847A(c)(6)(D)) or a biosimilar 
                biological product (as defined in section 
                1847A(c)(6)(H)) for which payment is made under this 
                part and that is furnished from a single-dose container 
                or single-use package.
                    ``(B) Exclusions.--The term `refundable single-dose 
                container or single-use package drug' does not 
                include--
                            ``(i) a drug or biological that is either a 
                        radiopharmaceutical or an imaging agent;
                            ``(ii) a drug or biological approved by the 
                        Food and Drug Administration for which dosage 
                        and administration instructions included in the 
                        labeling require filtration during the drug 
                        preparation process, prior to dilution and 
                        administration, and require that any unused 
                        portion of such drug after the filtration 
                        process be discarded after the completion of 
                        such filtration process; or
                            ``(iii) a drug or biological approved by 
                        the Food and Drug Administration on or after 
                        the date of enactment of this subsection and 
                        with respect to which payment has been made 
                        under this part for fewer than 18 months.
            ``(9) Report to congress.--Not later than 3 years after the 
        date of enactment of this subsection, the Office of the 
        Inspector General, after consultation with the Centers for 
        Medicare & Medicaid Services and the Food and Drug 
        Administration, shall submit to the Committee on Energy and 
        Commerce and the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance in the Senate, a 
        report on any impact this section is reported to have on the 
        licensure, market entry, market retention, or marketing of 
        biosimilar biological products. Such report shall be updated 
        periodically at the direction of the Committee on Energy and 
        Commerce and the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance in the Senate.''.

SEC. 103. PROVIDING FOR VARIATION IN PAYMENT FOR CERTAIN DRUGS COVERED 
              UNDER PART B OF THE MEDICARE PROGRAM.

    (a) In General.--Section 1847A(b) of the Social Security Act (42 
U.S.C. 1395w-3a(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by inserting after ``or 
                106 percent'' the following: ``(or, for a multiple 
                source drug (other than autologous cellular 
                immunotherapy) furnished on or after January 1, 2022, 
                the applicable percent specified in paragraph (9)(A) 
                for the drug and quarter involved)''; and
                    (B) in subparagraph (B) of paragraph (1), by 
                inserting after ``106 percent'' the following: ``(or, 
                for a single source drug or biological (other than 
                autologous cellular immunotherapy) furnished on or 
                after January 1, 2022, the applicable percent specified 
                in paragraph (9)(A) for the drug or biological and 
                quarter involved)''; and
            (2) by adding at the end the following new paragraph:
            ``(9) Application of variable percentages based on 
        percentile ranking of per beneficiary allowed charges.--
                    ``(A) Applicable percent to be applied.--
                            ``(i) In general.--Subject to clauses (ii), 
                        with respect to a drug or biological furnished 
                        in a calendar quarter beginning on or after 
                        January 1, 2022, if the Secretary determines 
                        that the percentile rank of a drug or 
                        biological under subparagraph (B)(i)(III), with 
                        respect to per beneficiary allowed charges for 
                        all such drugs or biologicals, is--
                                    ``(I) at least equal to the 85th 
                                percentile, the applicable percent for 
                                the drug for such quarter under this 
                                subparagraph is 104 percent;
                                    ``(II) at least equal to the 70th 
                                percentile, but less than the 85th 
                                percentile, such applicable percent is 
                                106 percent;
                                    ``(III) at least equal to the 50th 
                                percentile, but less than the 70th 
                                percentile, such applicable percent is 
                                108 percent; or
                                    ``(IV) less than the 50th 
                                percentile, such applicable percent is 
                                110 percent.
                            ``(ii) Cases where data not sufficiently 
                        available to compute per beneficiary allowed 
                        charges.--Subject to clause (iii), in the case 
                        of a drug or biological furnished for which the 
                        amount of payment is determined under 
                        subparagraph (A) or (B) of paragraph (1) and 
                        not under subsection (c)(4), for calendar 
                        quarters during a period in which data are not 
                        sufficiently available to compute a per 
                        beneficiary allowed charges for the drug or 
                        biological, the applicable percent is 106 
                        percent.
                    ``(B) Determination of percentile rank of per 
                beneficiary allowed charges of drugs.--
                            ``(i) In general.--With respect to a 
                        calendar quarter beginning on or after January 
                        1, 2022, for drugs and biologicals for which 
                        the amount of payment is determined under 
                        subparagraph (A) or (B) of paragraph (1), 
                        except for drugs or biologicals for which data 
                        are not sufficiently available, the Secretary 
                        shall--
                                    ``(I) compute the per beneficiary 
                                allowed charges (as defined in 
                                subparagraph (C)) for each such drug or 
                                biological;
                                    ``(II) adjust such per beneficiary 
                                allowed charges for the quarter, to the 
                                extent provided under subparagraph (D); 
                                and
                                    ``(III) array such adjusted per 
                                beneficiary allowed charges for all 
                                such drugs or biologicals from high to 
                                low and rank such drugs or biologicals 
                                by percentile of such arrayed per 
                                beneficiary allowed charges.
                            ``(ii) Frequency.--The Secretary shall make 
                        the computations under clause (i)(I) every 6 
                        months (or, if necessary, as determined by the 
                        Secretary, every 9 or 12 months) and such 
                        computations shall apply to succeeding calendar 
                        quarters until a new computation has been made.
                            ``(iii) Applicable data period.--For 
                        purposes of this paragraph, the term 
                        `applicable data period' means the most recent 
                        period for which the data necessary for making 
                        the computations under clause (i) are 
                        available, as determined by the Secretary.
                    ``(C) Per beneficiary allowed charges defined.--In 
                this paragraph, the term `per beneficiary allowed 
                charges' means, with respect to a drug or biological 
                for which the amount of payment is determined under 
                subparagraph (A) or (B) of paragraph (1)--
                            ``(i) the allowed charges for the drug or 
                        biological for which payment is so made for the 
                        applicable data period, as estimated by the 
                        Secretary; divided by
                            ``(ii) the number of individuals for whom 
                        any payment for the drug or biological was made 
                        under paragraph (1) for the applicable data 
                        period, as estimated by the Secretary.
                    ``(D) Adjustment to reflect changes in average 
                sales price.--In applying this paragraph for a 
                particular calendar quarter, the Secretary shall adjust 
                the per beneficiary allowed charges for a drug or 
                biological by multiplying such per beneficiary allowed 
                charges under subparagraph (C) for the applicable data 
                period by the ratio of--
                            ``(i) the average sales price for the drug 
                        or biological for the most recent calendar 
                        quarter used under subsection (c)(5)(B); to
                            ``(ii) the average sales price for the drug 
                        or biological for the calendar quarter (or the 
                        weighted average for the quarters involved) 
                        included in the applicable data period.''.
    (b) Application of Judicial Review Provisions.--Section 1847A(g) of 
the Social Security Act is amended--
            (1) by striking ``and'' at the end of paragraph (4);
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(6) the determination of per beneficiary allowed charges 
        of drugs or biologicals and ranking of such charges under 
        subsection (b)(9).''.

SEC. 104. ESTABLISHMENT OF MAXIMUM ADD-ON PAYMENT FOR DRUGS AND 
              BIOLOGICALS.

    (a) In General.--Section 1847A of the Social Security Act (42 
U.S.C. 1395w-3a), as amended by section 103, is further amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by striking ``paragraph (7)'' and 
                inserting ``paragraphs (7) and (10)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(10) Maximum add-on payment amount.--
                    ``(A) In general.--In determining the payment 
                amount under the provisions of subparagraph (A), (B), 
                or (C) of paragraph (1) of this subsection, subsection 
                (c)(4)(A)(ii), or subsection (d)(3)(C) for a drug or 
                biological furnished on or after January 1, 2022, if 
                the applicable add-on payment (as defined in 
                subparagraph (B)) for each drug or biological on a 
                claim for a date of service exceeds the maximum add-on 
                payment amount specified under subparagraph (C) for the 
                drug or biological, then the payment amount otherwise 
                determined for the drug or biological under those 
                provisions, as applicable, shall be reduced by the 
                amount of such excess.
                    ``(B) Applicable add-on payment defined.--In this 
                paragraph, the term `applicable add-on payment' means 
                the following amounts, determined without regard to the 
                application of subparagraph (A):
                            ``(i) In the case of a multiple source 
                        drug, an amount equal to the difference 
                        between--
                                    ``(I) the amount that would 
                                otherwise be applied under paragraph 
                                (1)(A); and
                                    ``(II) the amount that would be 
                                applied under such paragraph if `100 
                                percent' were substituted for the 
                                applicable percent (as defined in 
                                paragraph (9)) for such drug.
                            ``(ii) In the case of a single source drug 
                        or biological, an amount equal to the 
                        difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under paragraph 
                                (1)(B); and
                                    ``(II) the amount that would be 
                                applied under such paragraph if `100 
                                percent' were substituted for the 
                                applicable percent (as defined in 
                                paragraph (9)) for such drug or 
                                biological.
                            ``(iii) In the case of a biosimilar 
                        biological product, the amount otherwise 
                        determined under paragraph (8)(B).
                            ``(iv) In the case of a drug or biological 
                        during the initial period described in 
                        subsection (c)(4)(A), an amount equal to the 
                        difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under subsection 
                                (c)(4)(A)(ii); and
                                    ``(II) the amount that would be 
                                applied under such subsection if `100 
                                percent' were substituted, as 
                                applicable, for--
                                            ``(aa) `103 percent' in 
                                        subclause (I) of such 
                                        subsection; or
                                            ``(bb) any percent in 
                                        excess of 100 percent applied 
                                        under subclause (II) of such 
                                        subsection.
                            ``(v) In the case of a drug or biological 
                        to which subsection (d)(3)(C) applies, an 
                        amount equal to the difference between--
                                    ``(I) the amount that would 
                                otherwise be applied under such 
                                subsection; and
                                    ``(II) the amount that would be 
                                applied under such subsection if `100 
                                percent' were substituted, as 
                                applicable, for--
                                            ``(aa) any percent in 
                                        excess of 100 percent applied 
                                        under clause (i) of such 
                                        subsection; or
                                            ``(bb) `103 percent' in 
                                        clause (ii) of such subsection.
                    ``(C) Maximum add-on payment amount specified.--For 
                purposes of subparagraph (A), the maximum add-on 
                payment amount specified in this subparagraph is--
                            ``(i) with respect to a drug or biological 
                        (other than autologous cellular 
                        immunotherapy)--
                                    ``(I) for each of 2022 through 
                                2029, $1,000; and
                                    ``(II) for a subsequent year, the 
                                amount specified in this subparagraph 
                                for the preceding year increased by the 
                                percentage increase in the consumer 
                                price index for all urban consumers 
                                (all items; United States city average) 
                                for the 12-month period ending with 
                                June of the previous year; or
                            ``(ii) with respect to a drug or biological 
                        consisting of autologous cellular 
                        immunotherapy--
                                    ``(I) for each of 2022 through 
                                2029, $2,000; and
                                    ``(II) for a subsequent year, the 
                                amount specified in this subparagraph 
                                for the preceding year increased by the 
                                percentage increase in the consumer 
                                price index for all urban consumers 
                                (all items; United States city average) 
                                for the 12-month period ending with 
                                June of the previous year.
                Any amount determined under this subparagraph that is 
                not a multiple of $10 shall be rounded to the nearest 
                multiple of $10.''; and
            (2) in subsection (c)(4)(A)(ii), by striking ``in the 
        case'' and inserting ``subject to subsection (b)(10), in the 
        case''.
    (b) Conforming Amendments Relating to Separately Payable Drugs.--
            (1) OPPS.--Section 1833(t)(14) of the Social Security Act 
        (42 U.S.C. 1395l(t)(14)) is amended--
                    (A) in subparagraph (A)(iii)(II), by inserting ``, 
                subject to subparagraph (I)'' after ``are not 
                available''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(I) Application of maximum add-on payment for 
                separately payable drugs and biologicals.--In 
                establishing the amount of payment under subparagraph 
                (A) for a specified covered outpatient drug that is 
                furnished as part of a covered OPD service (or group of 
                services) on or after January 1, 2022, if such payment 
                is determined based on the average price for the year 
                established under section 1847A pursuant to clause 
                (iii)(II) of such subparagraph, the provisions of 
                subsection (b)(10) of section 1847A shall apply to the 
                amount of payment so established in the same manner as 
                such provisions apply to the amount of payment under 
                section 1847A.''.
            (2) ASC.--Section 1833(i)(2)(D) of the Social Security Act 
        (42 U.S.C. 1395l(i)(2)(D)) is amended--
                    (A) by moving clause (v) 6 ems to the left;
                    (B) by redesignating clause (vi) as clause (vii); 
                and
                    (C) by inserting after clause (v) the following new 
                clause:
                            ``(vi) If there is a separate payment under 
                        the system described in clause (i) for a drug 
                        or biological furnished on or after January 1, 
                        2022, the provisions of subsection (t)(14)(I) 
                        shall apply to the establishment of the amount 
                        of payment for the drug or biological under 
                        such system in the same manner in which such 
                        provisions apply to the establishment of the 
                        amount of payment under subsection 
                        (t)(14)(A).''.

SEC. 105. TREATMENT OF DRUG ADMINISTRATION SERVICES FURNISHED BY 
              CERTAIN EXCEPTED OFF-CAMPUS OUTPATIENT DEPARTMENTS OF A 
              PROVIDER.

    Section 1833(t)(16) of the Social Security Act (42 U.S.C. 
1395l(t)(16)) is amended by adding at the end the following new 
subparagraph:
                    ``(G) Special payment rule for drug administration 
                services furnished by an excepted department of a 
                provider.--
                            ``(i) In general.--In the case of a covered 
                        OPD service that is a drug administration 
                        service (as defined by the Secretary) furnished 
                        by a department of a provider described in 
                        clause (ii) or (iv) of paragraph (21)(B), the 
                        payment amount for such service furnished on or 
                        after January 1, 2022, shall be the same 
                        payment amount (as determined in paragraph 
                        (21)(C)) that would apply if the drug 
                        administration service was furnished by an off-
                        campus outpatient department of a provider (as 
                        defined in paragraph (21)(B)).
                            ``(ii) Application without regard to budget 
                        neutrality.--The reductions made under this 
                        subparagraph--
                                    ``(I) shall not be considered an 
                                adjustment under paragraph (2)(E); and
                                    ``(II) shall not be implemented in 
                                a budget neutral manner.''.

                  Subtitle B--Drug Price Transparency

SEC. 111. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.

    (a) In General.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.) is amended by adding at the end the following:

            ``PART W--DRUG PRICE REPORTING; DRUG VALUE FUND

``SEC. 399OO. REPORTING ON EXPLANATION FOR DRUG PRICE INCREASES.

    ``(a) Definitions.--In this section:
            ``(1) Manufacturer.--The term `manufacturer' means the 
        person--
                    ``(A) that holds the application for a drug 
                approved under section 505 of the Federal Food, Drug, 
                and Cosmetic Act or licensed under section 351 of this 
                Act; or
                    ``(B) who is responsible for setting the wholesale 
                acquisition cost for the drug.
            ``(2) Qualifying drug.--The term `qualifying drug' means 
        any drug that is approved under subsection (c) or (j) of 
        section 505 of the Federal Food, Drug, and Cosmetic Act or 
        licensed under subsection (a) or (k) of section 351 of this 
        Act--
                    ``(A) that has a wholesale acquisition cost of $100 
                or more, adjusted for inflation occurring after the 
                date of enactment of this section, for a month's supply 
                or a typical course of treatment that lasts less than a 
                month, and is--
                            ``(i) subject to section 503(b)(1) of the 
                        Federal Food, Drug, and Cosmetic Act;
                            ``(ii) administered or otherwise dispensed 
                        to treat a disease or condition affecting more 
                        than 200,000 persons in the United States; and
                            ``(iii) not a vaccine; and
                    ``(B) for which, during the previous calendar year, 
                at least 1 dollar of the total amount of sales were for 
                individuals enrolled under the Medicare program under 
                title XVIII of the Social Security Act (42 U.S.C. 1395 
                et seq.) or under a State Medicaid plan under title XIX 
                of such Act (42 U.S.C. 1396 et seq.) or under a waiver 
                of such plan.
            ``(3) Wholesale acquisition cost.--The term `wholesale 
        acquisition cost' has the meaning given that term in section 
        1847A(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
        3a(c)(6)(B)).
    ``(b) Report.--
            ``(1) Report required.--The manufacturer of a qualifying 
        drug shall submit a report to the Secretary for each increase 
        in the price of a qualifying drug that results in an increase 
        in the wholesale acquisition cost of that drug that is equal 
        to--
                    ``(A) 10 percent or more within a single calendar 
                year beginning on or after January 1, 2021; or
                    ``(B) 25 percent or more within three consecutive 
                calendar years for which the first such calendar year 
                begins on or after January 1, 2021.
            ``(2) Report deadline.--Each report described in paragraph 
        (1) shall be submitted to the Secretary--
                    ``(A) in the case of a report with respect to an 
                increase in the price of a qualifying drug that occurs 
                during the period beginning on January 1, 2021, and 
                ending on the day that is 60 days after the date of 
                enactment of this section, not later than 90 days after 
                such date of enactment; and
                    ``(B) in the case of a report with respect to an 
                increase in the price of a qualifying drug that occurs 
                after the period described in subparagraph (A), not 
                later than 30 days prior to the planned effective date 
                of such price increase for such qualifying drug.
    ``(c) Contents.--A report under subsection (b), consistent with the 
standard for disclosures described in section 213.3(d) of title 12, 
Code of Federal Regulations (as in effect on the date of enactment of 
this section), shall, at a minimum, include--
            ``(1) with respect to the qualifying drug--
                    ``(A) the percentage by which the manufacturer will 
                raise the wholesale acquisition cost of the drug within 
                the calendar year or three consecutive calendar years 
                as described in subsection (b)(1)(A) or (b)(1)(B), if 
                applicable, and the effective date of such price 
                increase;
                    ``(B) an explanation for, and description of, each 
                price increase for such drug that will occur during the 
                calendar year period described in subsection (b)(1)(A) 
                or the three consecutive calendar year period described 
                in subsection (b)(1)(B), as applicable;
                    ``(C) if known and different from the manufacturer 
                of the qualifying drug, the identity of--
                            ``(i) the sponsor or sponsors of any 
                        investigational new drug applications under 
                        section 505(i) of the Federal Food, Drug, and 
                        Cosmetic Act for clinical investigations with 
                        respect to such drug, for which the full 
                        reports are submitted as part of the 
                        application--
                                    ``(I) for approval of the drug 
                                under section 505 of such Act; or
                                    ``(II) for licensure of the drug 
                                under section 351 of this Act; and
                            ``(ii) the sponsor of an application for 
                        the drug approved under such section 505 of the 
                        Federal Food, Drug, and Cosmetic Act or 
                        licensed under section 351 of this Act;
                    ``(D) a description of the history of the 
                manufacturer's price increases for the drug since the 
                approval of the application for the drug under section 
                505 of the Federal Food, Drug, and Cosmetic Act or the 
                issuance of the license for the drug under section 351 
                of this Act, or since the manufacturer acquired such 
                approved application or license, if applicable;
                    ``(E) the current wholesale acquisition cost of the 
                drug;
                    ``(F) the total expenditures of the manufacturer 
                on--
                            ``(i) materials and manufacturing for such 
                        drug; and
                            ``(ii) acquiring patents and licensing for 
                        such drug;
                    ``(G) the percentage of total expenditures of the 
                manufacturer on research and development for such drug 
                that was derived from Federal funds;
                    ``(H) the total expenditures of the manufacturer on 
                research and development for such drug that is 
                necessary to demonstrate that it meets applicable 
                statutory standards for approval under section 505 of 
                the Federal Food, Drug, and Cosmetic Act or licensure 
                under section 351 of this Act, as applicable;
                    ``(I) the total expenditures of the manufacturer on 
                pursuing new or expanded indications or dosage changes 
                for such drug under section 505 of the Federal Food, 
                Drug, and Cosmetic Act or section 351 of this Act;
                    ``(J) the total expenditures of the manufacturer on 
                carrying out postmarket requirements related to such 
                drug, including under section 505(o)(3) of the Federal 
                Food, Drug, and Cosmetic Act;
                    ``(K) the total revenue and the net profit 
                generated from the qualifying drug for each calendar 
                year since the approval of the application for the drug 
                under section 505 of the Federal Food, Drug, and 
                Cosmetic Act or the issuance of the license for the 
                drug under section 351, or since the manufacturer 
                acquired such approved application or license; and
                    ``(L) the total costs associated with marketing and 
                advertising for the qualifying drug;
            ``(2) with respect to the manufacturer--
                    ``(A) the total revenue and the net profit of the 
                manufacturer for each of the 1-year period described in 
                subsection (b)(1)(A) or the 3-year period described in 
                subsection (b)(1)(B), as applicable;
                    ``(B) all stock-based performance metrics used by 
                the manufacturer to determine executive compensation 
                for each of the 1-year period described in subsection 
                (b)(1)(A) or the 3-year period described in subsection 
                (b)(1)(B), as applicable; and
                    ``(C) any additional information the manufacturer 
                chooses to provide related to drug pricing decisions, 
                such as total expenditures on--
                            ``(i) drug research and development; or
                            ``(ii) clinical trials, including on drugs 
                        that failed to receive approval by the Food and 
                        Drug Administration; and
            ``(3) such other related information as the Secretary 
        considers appropriate and as specified by the Secretary through 
        notice-and-comment rulemaking.
    ``(d) Information Provided.--The manufacturer of a qualifying drug 
that is required to submit a report under subsection (b), shall ensure 
that such report and any explanation for, and description of, each 
price increase described in subsection (c)(1)(B) shall be truthful, not 
misleading, and accurate.
    ``(e) Civil Monetary Penalty.--Any manufacturer of a qualifying 
drug that fails to submit a report for the drug as required by this 
section, following notification by the Secretary to the manufacturer 
that the manufacturer is not in compliance with this section, shall be 
subject to a civil monetary penalty of $75,000 for each day on which 
the violation continues.
    ``(f) False Information.--Any manufacturer that submits a report 
for a drug as required by this section that knowingly provides false 
information in such report is subject to a civil monetary penalty in an 
amount not to exceed $75,000 for each item of false information.
    ``(g) Public Posting.--
            ``(1) In general.--Subject to paragraph (3), the Secretary 
        shall post each report submitted under subsection (b) on the 
        public website of the Department of Health and Human Services 
        the day the price increase of a qualifying drug is scheduled to 
        go into effect.
            ``(2) Format.--In developing the format in which reports 
        will be publicly posted under paragraph (1), the Secretary 
        shall consult with stakeholders, including beneficiary groups, 
        and shall seek feedback from consumer advocates and readability 
        experts on the format and presentation of the content of such 
        reports to ensure that such reports are--
                    ``(A) user-friendly to the public; and
                    ``(B) written in plain language that consumers can 
                readily understand.
            ``(3) Protected information.--Nothing in this section shall 
        be construed to authorize the public disclosure of information 
        submitted by a manufacturer that is prohibited from disclosure 
        by applicable laws concerning the protection of trade secrets, 
        commercial information, and other information covered under 
        such laws.

``SEC. 399OO-1. ANNUAL REPORT TO CONGRESS.

    ``(a) In General.--Subject to subsection (b), the Secretary shall 
submit to Congress, and post on the public website of the Department of 
Health and Human Services in a way that is user-friendly to the public 
and written in plain language that consumers can readily understand, an 
annual report--
            ``(1) summarizing the information reported pursuant to 
        section 399OO;
            ``(2) including copies of the reports and supporting 
        detailed economic analyses submitted pursuant to such section;
            ``(3) detailing the costs and expenditures incurred by the 
        Department of Health and Human Services in carrying out section 
        399OO; and
            ``(4) explaining how the Department of Health and Human 
        Services is improving consumer and provider information about 
        drug value and drug price transparency.
    ``(b) Protected Information.--Nothing in this section shall be 
construed to authorize the public disclosure of information submitted 
by a manufacturer that is prohibited from disclosure by applicable laws 
concerning the protection of trade secrets, commercial information, and 
other information covered under such laws.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act.

SEC. 112. PUBLIC DISCLOSURE OF DRUG DISCOUNTS.

    Section 1150A of the Social Security Act (42 U.S.C. 1320b-23) is 
amended--
            (1) in subsection (c), in the matter preceding paragraph 
        (1), by inserting ``(other than as permitted under subsection 
        (e))'' after ``disclosed by the Secretary''; and
            (2) by adding at the end the following new subsection:
    ``(e) Public Availability of Certain Information.--
            ``(1) In general.--In order to allow the comparison of 
        PBMs' ability to negotiate rebates, discounts, direct and 
        indirect remuneration fees, administrative fees, and price 
        concessions and the amount of such rebates, discounts, direct 
        and indirect remuneration fees, administrative fees, and price 
        concessions that are passed through to plan sponsors, beginning 
        January 1, 2022, the Secretary shall make available on the 
        Internet website of the Department of Health and Human Services 
        the information with respect to the second preceding calendar 
        year provided to the Secretary on generic dispensing rates (as 
        described in paragraph (1) of subsection (b)) and information 
        provided to the Secretary under paragraphs (2) and (3) of such 
        subsection that, as determined by the Secretary, is with 
        respect to each PBM.
            ``(2) Availability of data.--In carrying out paragraph (1), 
        the Secretary shall ensure the following:
                    ``(A) Confidentiality.--The information described 
                in such paragraph is displayed in a manner that 
                prevents the disclosure of information, with respect to 
                an individual drug or an individual plan, on rebates, 
                discounts, direct and indirect remuneration fees, 
                administrative fees, and price concessions.
                    ``(B) Class of drug.--The information described in 
                such paragraph is made available by class of drug, 
                using an existing classification system, but only if 
                the class contains such number of drugs, as specified 
                by the Secretary (but not fewer than three drugs), to 
                ensure confidentiality of proprietary information or 
                other information that is prevented to be disclosed 
                under subparagraph (A).''.

SEC. 113. STUDY OF PHARMACEUTICAL SUPPLY CHAIN INTERMEDIARIES AND 
              MERGER ACTIVITY.

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

SEC. 114. MAKING PRESCRIPTION DRUG MARKETING SAMPLE INFORMATION 
              REPORTED BY MANUFACTURERS AVAILABLE TO CERTAIN 
              INDIVIDUALS AND ENTITIES.

    (a) In General.--Section 1128H of the Social Security Act (42 
U.S.C. 1320a-7i) is amended--
            (1) by redesignating subsection (b) as subsection (e); and
            (2) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Data Sharing Agreements.--
            ``(1) In general.--The Secretary shall enter into 
        agreements with the specified data sharing individuals and 
        entities described in paragraph (2) under which--
                    ``(A) upon request of such an individual or entity, 
                as applicable, the Secretary makes available to such 
                individual or entity the information submitted under 
                subsection (a) by manufacturers and authorized 
                distributors of record; and
                    ``(B) such individual or entity agrees to not 
                disclose publicly or to another individual or entity 
                any information that identifies a particular 
                practitioner or health care facility.
            ``(2) Specified data sharing individuals and entities.--For 
        purposes of paragraph (1), the specified data sharing 
        individuals and entities described in this paragraph are the 
        following:
                    ``(A) Oversight agencies.--Health oversight 
                agencies (as defined in section 164.501 of title 45, 
                Code of Federal Regulations), including the Centers for 
                Medicare & Medicaid Services, the Office of the 
                Inspector General of the Department of Health and Human 
                Services, the Government Accountability Office, the 
                Congressional Budget Office, the Medicare Payment 
                Advisory Commission, and the Medicaid and CHIP Payment 
                and Access Commission.
                    ``(B) Researchers.--Individuals who conduct 
                scientific research (as defined in section 164.501 of 
                title 45, Code of Federal Regulations) in relevant 
                areas as determined by the Secretary.
                    ``(C) Payers.--Private and public health care 
                payers, including group health plans, health insurance 
                coverage offered by health insurance issuers, Federal 
                health programs, and State health programs.
            ``(3) Exemption from freedom of information act.--Except as 
        described in paragraph (1), the Secretary may not be compelled 
        to disclose the information submitted under subsection (a) to 
        any individual or entity. For purposes of section 552 of title 
        5, United States Code (commonly referred to as the Freedom of 
        Information Act), this paragraph shall be considered a statute 
        described in subsection (b)(3)(B) of such section.
    ``(c) Penalties.--
            ``(1) Data sharing agreements.--Subject to paragraph (3), 
        any specified data sharing individual or entity described in 
        subsection (b)(2) that violates the terms of a data sharing 
        agreement the individual or entity has with the Secretary under 
        subsection (b)(1) shall be subject to a civil money penalty of 
        not less than $1,000, but not more than $10,000, for each such 
        violation. Such penalty shall be imposed and collected in the 
        same manner as civil money penalties under subsection (a) of 
        section 1128A are imposed and collected under that section.
            ``(2) Failure to report.--Subject to paragraph (3), any 
        manufacturer or authorized distributor of record of an 
        applicable drug under subsection (a) that fails to submit 
        information required under such subsection in a timely manner 
        in accordance with rules or regulations promulgated to carry 
        out such subsection shall be subject to a civil money penalty 
        of not less than $1,000, but not more than $10,000, for each 
        such failure. Such penalty shall be imposed and collected in 
        the same manner as civil money penalties under subsection (a) 
        of section 1128A are imposed and collected under that section.
            ``(3) Limitation.--The total amount of civil money 
        penalties imposed under paragraph (1) or (2) with respect to a 
        year and an individual or entity described in paragraph (1) or 
        a manufacturer or distributor described in paragraph (2), 
        respectively, shall not exceed $150,000.
    ``(d) Drug Sample Distribution Information.--
            ``(1) In general.--Not later than January 1 of each year 
        (beginning with 2022), the Secretary shall maintain a list 
        containing information related to the distribution of samples 
        of applicable drugs. Such list shall provide the following 
        information with respect to the preceding year:
                    ``(A) The name of the manufacturer or authorized 
                distributor of record of an applicable drug for which 
                samples were requested or distributed under this 
                section.
                    ``(B) The quantity and class of drug samples 
                requested.
                    ``(C) The quantity and class of drug samples 
                distributed.
            ``(2) Public availability.--The Secretary shall make the 
        information in such list available to the public on the 
        Internet website of the Food and Drug Administration.''.
    (b) FDA Maintenance of Information.--The Food and Drug 
Administration shall maintain information available to affected 
reporting companies to ensure their ability to fully comply with the 
requirements of section 1128H of the Social Security Act.
    (c) Prohibition on Distribution of Samples of Opioids.--Section 
503(d) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) 
is amended--
            (1) by moving the margin of paragraph (4) 2 ems to the 
        left; and
            (2) by adding at the end the following:
    ``(5) No person may distribute a drug sample of a drug that is--
            ``(A) an applicable drug (as defined in section 1128H(e) of 
        the Social Security Act);
            ``(B) a controlled substance (as defined in section 102 of 
        the Controlled Substances Act) for which the findings required 
        under section 202(b)(2) of such Act have been made; and
            ``(C) approved under section 505 for use in the management 
        or treatment of pain (other than for the management or 
        treatment of a substance use disorder).''.
    (d) MedPAC Report.--Not later than 3 years after the date of the 
enactment of this Act, the Medicare Payment Advisory Commission shall 
conduct a study on the impact of drug samples on provider prescribing 
practices and health care costs and may, as the Commission deems 
appropriate, make recommendations on such study.

SEC. 115. SENSE OF CONGRESS REGARDING THE NEED TO EXPAND COMMERCIALLY 
              AVAILABLE DRUG PRICING COMPARISON PLATFORMS.

    It is the sense of Congress that--
            (1) commercially available drug pricing comparison 
        platforms can, at no cost, help patients find the lowest price 
        for their medications at their local pharmacy;
            (2) such platforms should be integrated, to the maximum 
        extent possible, in the health care delivery ecosystem; and
            (3) pharmacy benefit managers should work to disclose 
        generic and brand name drug prices to such platforms to ensure 
        that--
                    (A) patients can benefit from the lowest possible 
                price available to them; and
                    (B) overall drug prices can be reduced as more 
                educated purchasing decisions are made based on price 
                transparency.

              Subtitle C--Medicare Part D Benefit Redesign

SEC. 121. 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)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``for a year preceding 2022 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 2022 and each subsequent year'' after 
                        ``paragraph (3)'';
                            (ii) in clause (i), by inserting after ``25 
                        percent'' the following: ``(or, for 2022 and 
                        each subsequent year, 15 percent)''; and
                            (iii) in clause (ii), by inserting ``(or, 
                        for 2022 and each subsequent year, 15 
                        percent)'' after ``25 percent'';
                    (B) in subparagraph (C)--
                            (i) in clause (i), in the matter preceding 
                        subclause (I), by inserting ``for a year 
                        preceding 2022,'' after ``paragraph (4),''; and
                            (ii) in clause (ii)(III), by striking ``and 
                        each subsequent year'' and inserting ``and 
                        2021''; and
                    (C) in subparagraph (D)--
                            (i) in clause (i)--
                                    (I) in the matter preceding 
                                subclause (I), by inserting ``for a 
                                year preceding 2022,'' after 
                                ``paragraph (4),''; and
                                    (II) in subclause (I)(bb), by 
                                striking ``a year after 2018'' and 
                                inserting ``each of years 2018 through 
                                2021''; and
                            (ii) in clause (ii)(V), by striking ``2019 
                        and each subsequent year'' and inserting ``each 
                        of years 2019 through 2021'';
            (2) in paragraph (3)(A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``for a year preceding 2022,'' after ``and 
                (4),''; and
                    (B) in clause (ii), by striking ``for a subsequent 
                year'' and inserting ``for each of years 2007 through 
                2021'';
            (3) in paragraph (4)--
                    (A) in subparagraph (A)--
                            (i) in clause (i)--
                                    (I) by redesignating subclauses (I) 
                                and (II) as items (aa) and (bb), 
                                respectively, and indenting 
                                appropriately;
                                    (II) in the matter preceding item 
                                (aa), as redesignated by subclause (I), 
                                by striking ``is equal to the greater 
                                of--'' and inserting ``is equal to--
                                    ``(I) for a year preceding 2022, 
                                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 2022 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 2021 for purposes of 
                                section 1860D-14(a)(1)(D)(iii).'';
                    (B) in subparagraph (B)--
                            (i) in clause (i)--
                                    (I) in subclause (V), by striking 
                                ``or'' at the end;
                                    (II) in subclause (VI)--
                                            (aa) by striking ``for a 
                                        subsequent year'' and inserting 
                                        ``for 2021''; 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 2022, is equal to 
                                $3,100; 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 2022 
                for amounts''; and
                    (D) in subparagraph (E), by striking ``In 
                applying'' and inserting ``For each of 2011 through 
                2021, in applying''.
    (b) Decreasing 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 2022, 80 percent'';
            (2) in subparagraph (A), as added by paragraph (1), by 
        striking the period at the end and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) for 2022 and each subsequent year, the sum 
                of--
                            ``(i) an amount equal to 20 percent of the 
                        allowable reinsurance costs (as specified in 
                        paragraph (2)) 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) with respect to applicable drugs (as 
                        defined in section 1860D-14B(g)(2)); and
                            ``(ii) an amount equal to 30 percent of the 
                        allowable reinsurance costs (as specified in 
                        paragraph (2)) 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) with respect to covered part D drugs 
                        that are not applicable drugs (as so 
                        defined).''.
    (c) Manufacturer Discount Program.--
            (1) In general.--Part D of title XVIII of the Social 
        Security Act is amended by inserting after section 1860D-14A 
        (42 U.S.C. 1495w-114) the following new section:

``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a manufacturer 
discount program (in this section referred to as the `program'). Under 
the program, the Secretary shall enter into agreements described in 
subsection (b) with manufacturers and provide for the performance of 
the duties described in subsection (c). The Secretary shall establish a 
model agreement for use under the program by not later than January 1, 
2023, in consultation with manufacturers, and allow for comment on such 
model agreement.
    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for 
                applicable drugs of the manufacturer that are dispensed 
                on or after January 1, 2024.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--The discounted prices described in 
                subparagraph (A) shall be provided to the applicable 
                beneficiary at the pharmacy or by the mail order 
                service at the point-of-sale of an applicable drug.
            ``(2) Provision of appropriate data.--Each manufacturer 
        with an agreement in effect under this section shall collect 
        and have available appropriate data, as determined by the 
        Secretary, to ensure that it can demonstrate to the Secretary 
        compliance with the requirements under the program.
            ``(3) Compliance with requirements for administration of 
        program.--Each manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary or a third party with a contract under subsection 
        (d)(3), as applicable, for purposes of administering the 
        program, including any determination under subparagraph (A) of 
        subsection (c)(1) or procedures established under such 
        subsection (c)(1).
            ``(4) Length of agreement.--
                    ``(A) In general.--An agreement under this section 
                shall be effective for an initial period of not less 
                than 12 months and shall be automatically renewed for a 
                period of not less than 1 year unless terminated under 
                subparagraph (B).
                    ``(B) Termination.--
                            ``(i) By the secretary.--The Secretary may 
                        provide for termination of an agreement under 
                        this section for a knowing and willful 
                        violation of the requirements of the agreement 
                        or other good cause shown. Such termination 
                        shall not be effective earlier than 30 days 
                        after the date of notice to the manufacturer of 
                        such termination. The Secretary shall provide, 
                        upon request, a manufacturer with a hearing 
                        concerning such a termination, and such hearing 
                        shall take place prior to the effective date of 
                        the termination with sufficient time for such 
                        effective date to be repealed if the Secretary 
                        determines appropriate.
                            ``(ii) By a manufacturer.--A manufacturer 
                        may terminate an agreement under this section 
                        for any reason. Any such termination shall be 
                        effective, with respect to a plan year--
                                    ``(I) if the termination occurs 
                                before January 30 of a plan year, as of 
                                the day after the end of the plan year; 
                                and
                                    ``(II) if the termination occurs on 
                                or after January 30 of a plan year, as 
                                of the day after the end of the 
                                succeeding plan year.
                            ``(iii) Effectiveness of termination.--Any 
                        termination under this subparagraph shall not 
                        affect discounts for applicable drugs of the 
                        manufacturer that are due under the agreement 
                        before the effective date of its termination.
                            ``(iv) Notice to third party.--The 
                        Secretary shall provide notice of such 
                        termination to a third party with a contract 
                        under subsection (d)(3) within not less than 30 
                        days before the effective date of such 
                        termination.
            ``(5) Effective date of agreement.--An agreement under this 
        section shall take effect on a date determined appropriate by 
        the Secretary, which may be at the start of a calendar quarter.
    ``(c) Duties Described.--The duties described in this subsection 
are the following:
            ``(1) Administration of program.--Administering the 
        program, including--
                    ``(A) the determination of the amount of the 
                discounted price of an applicable drug of a 
                manufacturer;
                    ``(B) the establishment of procedures under which 
                discounted prices are provided to applicable 
                beneficiaries at pharmacies or by mail order service at 
                the point-of-sale of an applicable drug;
                    ``(C) the establishment of procedures to ensure 
                that, not later than the applicable number of calendar 
                days after the dispensing of an applicable drug by a 
                pharmacy or mail order service, the pharmacy or mail 
                order service is reimbursed for an amount equal to the 
                difference between--
                            ``(i) the negotiated price of the 
                        applicable drug; and
                            ``(ii) the discounted price of the 
                        applicable drug;
                    ``(D) the establishment of procedures to ensure 
                that the discounted price for an applicable drug under 
                this section is applied before any coverage or 
                financial assistance under other health benefit plans 
                or programs that provide coverage or financial 
                assistance for the purchase or provision of 
                prescription drug coverage on behalf of applicable 
                beneficiaries as the Secretary may specify; and
                    ``(E) providing a reasonable dispute resolution 
                mechanism to resolve disagreements between 
                manufacturers, applicable beneficiaries, and the third 
                party with a contract under subsection (d)(3).
            ``(2) Monitoring compliance.--
                    ``(A) In general.--The Secretary shall monitor 
                compliance by a manufacturer with the terms of an 
                agreement under this section.
                    ``(B) Notification.--If a third party with a 
                contract under subsection (d)(3) determines that the 
                manufacturer is not in compliance with such agreement, 
                the third party shall notify the Secretary of such 
                noncompliance for appropriate enforcement under 
                subsection (e).
            ``(3) Collection of data from prescription drug plans and 
        ma-pd plans.--The Secretary may collect appropriate data from 
        prescription drug plans and MA-PD plans in a timeframe that 
        allows for discounted prices to be provided for applicable 
        drugs under this section.
    ``(d) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall provide for the implementation of this section, including 
        the performance of the duties described in subsection (c).
            ``(2) Limitation.--In providing for the implementation of 
        this section, the Secretary shall not receive or distribute any 
        funds of a manufacturer under the program.
            ``(3) Contract with third parties.--The Secretary shall 
        enter into a contract with 1 or more third parties to 
        administer the requirements established by the Secretary in 
        order to carry out this section. At a minimum, the contract 
        with a third party under the preceding sentence shall require 
        that the third party--
                    ``(A) receive and transmit information between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate;
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the 
                obligations of manufacturers under agreements under 
                this section;
                    ``(C) provide adequate and timely information to 
                manufacturers, consistent with the agreement with the 
                manufacturer under this section, as necessary for the 
                manufacturer to fulfill its obligations under this 
                section; and
                    ``(D) permit manufacturers to conduct periodic 
                audits, directly or through contracts, of the data and 
                information used by the third party to determine 
                discounts for applicable drugs of the manufacturer 
                under the program.
            ``(4) Performance requirements.--The Secretary shall 
        establish performance requirements for a third party with a 
        contract under paragraph (3) and safeguards to protect the 
        independence and integrity of the activities carried out by the 
        third party under the program under this section.
            ``(5) Administration.--Chapter 35 of title 44, United 
        States Code, shall not apply to the program under this section.
    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in 
        effect under this section shall be subject to periodic audit by 
        the Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general.--The Secretary shall impose a 
                civil money penalty on a manufacturer that fails to 
                provide applicable beneficiaries discounts for 
                applicable drugs of the manufacturer in accordance with 
                such agreement for each such failure in an amount the 
                Secretary determines is commensurate with the sum of--
                            ``(i) the amount that the manufacturer 
                        would have paid with respect to such discounts 
                        under the agreement, which will then be used to 
                        pay the discounts which the manufacturer had 
                        failed to provide; and
                            ``(ii) 25 percent of such amount.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).
    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not on the formulary of 
the prescription drug plan or MA-PD plan that the applicable 
beneficiary is enrolled in.
    ``(g) Definitions.--In this section:
            ``(1) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who, on the date of dispensing 
        a covered part D drug--
                    ``(A) is enrolled in a prescription drug plan or an 
                MA-PD plan;
                    ``(B) is not enrolled in a qualified retiree 
                prescription drug plan; and
                    ``(C) has incurred costs for covered part D drugs 
                in the year that are equal to or exceed the annual 
                deductible specified in section 1860D-2(b)(1) for such 
                year.
            ``(2) Applicable drug.--The term `applicable drug' means, 
        with respect to an applicable beneficiary, a covered part D 
        drug--
                    ``(A) approved under a new drug application under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act or, in the case of a biologic product, licensed 
                under section 351 of the Public Health Service Act 
                (including a product licensed under subsection (k) of 
                such section); 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 furnished during a year to an applicable 
                beneficiary, 90 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 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 at or 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 at or above such annual deductible.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, either directly or indirectly by 
        extraction from substances of natural origin, or independently 
        by means of chemical synthesis, or by a combination of 
        extraction and chemical synthesis. Such term does not include a 
        wholesale distributor of drugs or a retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has 
        the meaning given such term in section 1860D-2(d)(1)(B), except 
        that such negotiated price shall not include any dispensing fee 
        for an applicable drug.
            ``(7) Qualified retiree prescription drug plan.--The term 
        `qualified retiree prescription drug plan' has the meaning 
        given such term in section 11860D-22(a)(2).''.
            (2) Sunset of medicare coverage gap discount program.--
        Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
        114a) is amended--
                    (A) in subsection (a), in the first sentence, by 
                striking ``The Secretary'' and inserting ``Subject to 
                subsection (h), the Secretary''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(h) Sunset of Program.--
            ``(1) In general.--The program shall not apply to 
        applicable drugs dispensed on or after January 1, 2024, and, 
        subject to paragraph (2), agreements under this section shall 
        be terminated as of such date.
            ``(2) Continued application for applicable drugs dispensed 
        prior to sunset.--The provisions of this section (including all 
        responsibilities and duties) shall continue to apply after 
        January 1, 2024, with respect to applicable drugs dispensed 
        prior to such date.''.
            (3) Inclusion of actuarial value of manufacturer discounts 
        in bids.--Section 1860D-11 of the Social Security Act (42 
        U.S.C. 1395w-111) is amended--
                    (A) in subsection (b)(2)(C)(iii)--
                            (i) by striking ``assumptions regarding the 
                        reinsurance'' and inserting ``assumptions 
                        regarding--
                                    ``(I) the reinsurance''; and
                            (ii) by adding at the end the following:
                                    ``(II) for 2024 and each subsequent 
                                year, the manufacturer discounts 
                                provided under section 1860D- 14B 
                                subtracted from the actuarial value to 
                                produce such bid; and''; and
                    (B) in subsection (c)(1)(C)--
                            (i) by striking ``an actuarial valuation of 
                        the reinsurance'' and inserting ``an actuarial 
                        valuation of--
                            ``(i) the reinsurance'';
                            (ii) in clause (i), as added by clause (i) 
                        of this subparagraph, by adding ``and'' at the 
                        end; and
                            (iii) by adding at the end the following:
                            ``(ii) for 2024 and each subsequent year, 
                        the manufacturer discounts provided under 
                        section 1860D-14B;''.
            (4) Clarification regarding exclusion of manufacturer 
        discounts from troop.--Section 1860D-2(b)(4) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
                    (A) in subparagraph (C), by inserting ``and subject 
                to subparagraph (F)'' after ``subparagraph (E)''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(F) Clarification regarding exclusion of 
                manufacturer discounts.--In applying subparagraph (A), 
                incurred costs shall not include any manufacturer 
                discounts provided under section 1860D-14B.''.
    (d) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``Costs.--For purposes'' and 
                inserting ``Costs.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                purposes''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) Inclusion of manufacturer discounts on 
                applicable drugs.--For purposes of applying 
                subparagraph (A), the term `allowable reinsurance 
                costs' shall include the portion of the negotiated 
                price (as defined in section 1860D-14B(g)(6)) of an 
                applicable drug (as defined in section 1860D-14(g)(2)) 
                that was paid by a manufacturer under the manufacturer 
                discount program under section 1860D-14B.''; and
            (2) in paragraph (3)--
                    (A) in the first sentence, by striking ``For 
                purposes'' and inserting ``Subject to paragraph (2)(B), 
                for purposes''; and
                    (B) in the second sentence, by inserting ``or, in 
                the case of an applicable drug, by a manufacturer'' 
                after ``by the individual or under the plan''.
    (e) Updating Risk Adjustment Methodologies to Account for Part D 
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act 
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following 
new paragraph:
            ``(3) Updating risk adjustment methodologies to account for 
        part d modernization redesign.--The Secretary shall update the 
        risk adjustment model used to adjust bid amounts pursuant to 
        this subsection as appropriate to take into account changes in 
        benefits under this part pursuant to the amendments made by 
        section 121 of the Lower Costs, More Cures Act of 2021.''.
    (f) Conditions for Coverage of Drugs Under This Part.--Section 
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(4) participate in the manufacturer discount program 
        under section 1860D-14B;
            ``(5) have entered into and have in effect an agreement 
        described in subsection (b) of such section 1860D-14B with the 
        Secretary; and
            ``(6) have entered into and have in effect, under terms and 
        conditions specified by the Secretary, a contract with a third 
        party that the Secretary has entered into a contract with under 
        subsection (d)(3) of such section 1860D-14B.'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a) 
shall apply to covered part D drugs dispensed under this part on or 
after January 1, 2011, and before January 1, 2024, and paragraphs (4) 
through (6) of such subsection shall apply to covered part D drugs 
dispensed on or after January 1, 2024.''; and
            (3) in subsection (c), by striking paragraph (2) and 
        inserting the following:
            ``(2) the Secretary determines that in the period beginning 
        on January 1, 2011, and ending on December 31, 2011 (with 
        respect to paragraphs (1) through (3) of subsection (a)) or the 
        period beginning on January 1, 2024, and ending December 31, 
        2024 (with respect to paragraphs (4) through (6) of such 
        subsection), there were extenuating circumstances.''.
    (g) Conforming Amendments.--
            (1) Section 1860D-2 of the Social Security Act (42 U.S.C. 
        1395w-102) is amended--
                    (A) in subsection (a)(2)(A)(i)(I), by striking ``, 
                or an increase in the initial'' and inserting ``or for 
                a year preceding 2024 an increase in the initial'';
                    (B) in subsection (c)(1)(C)--
                            (i) in the subparagraph heading, by 
                        striking ``at initial coverage limit''; and
                            (ii) by inserting ``for a year preceding 
                        2024 or the annual out-of-pocket threshold 
                        specified in subsection (b)(4)(B) for the year 
                        for 2024 and each subsequent year'' after 
                        ``subsection (b)(3) for the year'' each place 
                        it appears; and
                    (C) in subsection (d)(1)(A), by striking ``or an 
                initial'' and inserting ``or for a year preceding 2024, 
                an initial''.
            (2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act 
        (42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the 
        initial'' and inserting ``for a year preceding 2024, the 
        initial''.
            (3) Section 1860D-14(a) of the Social Security Act (42 
        U.S.C. 1395w-114(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2024, the continuation'';
                            (ii) in subparagraph (D)(iii), by striking 
                        ``1860D-2(b)(4)(A)(i)(I)'' and inserting 
                        ``1860D-2(b)(4)(A)(i)(I)(aa)''; and
                            (iii) in subparagraph (E), by striking 
                        ``The elimination'' and inserting ``For a year 
                        preceding 2024, the elimination''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (C), by striking ``The 
                        continuation'' and inserting ``For a year 
                        preceding 2024, the continuation''; and
                            (ii) in subparagraph (E)--
                                    (I) by inserting ``for a year 
                                preceding 2024,'' after ``subsection 
                                (c)''; and
                                    (II) by striking ``1860D- 
                                2(b)(4)(A)(i)(I)'' and inserting 
                                ``1860D-2(b)(4)(A)(i)(I)(aa)''.
            (4) Section 1860D-21(d)(7) of the Social Security Act (42 
        U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
        2(b)(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 2024, any 
                        discount'';
                    (B) in clause (i), as inserted by subparagraph (A) 
                of this paragraph, by striking the period at the end 
                and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
                            ``(ii) for 2024 and each subsequent year, 
                        any discount provided pursuant to section 
                        1860D-14B.''.
            (6) Section 1860D-41(a)(6) of the Social Security Act (42 
        U.S.C. 1395w-151(a)(6)) is amended--
                    (A) by inserting ``for a year before 2024'' after 
                ``1860D-2(b)(3)''; and
                    (B) by inserting ``for such year'' before the 
                period.
    (h) Effective Date.--The amendments made by this section shall 
apply to plan year 2024 and subsequent plan years.

              Subtitle D--Other Medicare Part D Provisions

SEC. 131. ALLOWING THE OFFERING OF ADDITIONAL PRESCRIPTION DRUG PLANS 
              UNDER MEDICARE PART D.

    (a) Rescinding and Issuance of New Guidance.--Not later than one 
year after the date of the enactment of this Act, the Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall--
            (1) rescind sections of any sub-regulatory guidance that 
        limit the number of prescription drug plans in each PDP region 
        that may be offered by a PDP sponsor under part D of title 
        XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.); 
        and
            (2) issue new guidance specifying that a PDP sponsor may 
        offer up to 4 (or a greater number if determined appropriate by 
        the Secretary) prescription drug plans in each PDP region, 
        except in cases where the PDP sponsor may offer up to 2 
        additional plans in a PDP region pursuant to section 1860D-
        11(d)(4) of the Social Security Act (42 U.S.C. 1395w-
        111(d)(4)), as added by subsection (b).
    (b) Offering of Additional Plans.--Section 1860D-11(d) of the 
Social Security Act (42 U.S.C. 1395w-111(d)) is amended by adding at 
the end the following new paragraph:
            ``(4) Offering of additional plans.--
                    ``(A) In general.--For plan year 2022 and each 
                subsequent plan year, a PDP sponsor may offer up to 2 
                additional prescription drug plans in a PDP region (in 
                addition to any limit established by the Secretary 
                under this part) provided that the PDP sponsor complies 
                with subparagraph (B) with respect to at least one such 
                prescription drug plan.
                    ``(B) Requirements.--In order to be eligible to 
                offer up to 2 additional plans in a PDP region pursuant 
                to subparagraph (A), a PDP sponsor must ensure that, 
                with respect to at least one such prescription drug 
                plan, the sponsor or any entity that provides pharmacy 
                benefits management services under a contract with any 
                such sponsor or plan does not receive direct or 
                indirect remuneration, as defined in section 423.308 of 
                title 42, Code of Federal Regulations (or any successor 
                regulation), unless at least 25 percent of the 
                aggregate reductions in price or other remuneration 
                received by the PDP sponsor or entity from drug 
                manufacturers with respect to the plan and plan year--
                            ``(i) are reflected at the point-of-sale to 
                        the enrollee; or
                            ``(ii) are used to reduce total beneficiary 
                        cost-sharing estimated by the PDP sponsor for 
                        prescription drug coverage under the plan in 
                        the annual bid submitted by the PDP sponsor 
                        under section 1860D-11(b).
                    ``(C) Definition of reductions in price.--For 
                purposes of subparagraph (B), the term `reductions in 
                price' refers only to collectible amounts, as 
                determined by the Secretary, which excludes amounts 
                which after adjudication and reconciliation with 
                pharmacies and manufacturers are duplicate in nature, 
                contrary to other contractual clauses, or otherwise 
                ineligible (such as due to beneficiary disenrollment or 
                coordination of benefits).''.
    (c) Rule of Construction.--Nothing in the provisions of, or 
amendments made by, this section shall be construed as limiting the 
ability of the Secretary to increase any limit otherwise applicable on 
the number of prescription drug plans that a PDP sponsor may offer, at 
the discretion of the PDP sponsor, in a PDP region under part D of 
title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.).

SEC. 132. ALLOWING CERTAIN ENROLLEES OF PRESCRIPTION DRUG PLANS AND MA-
              PD PLANS UNDER MEDICARE PROGRAM TO SPREAD OUT COST-
              SHARING UNDER CERTAIN CIRCUMSTANCES.

    (a) Standard Prescription Drug Coverage.--Section 1860D-2(b)(2) of 
the Social Security Act (42 U.S.C. 1395w-102(b)(2)), as amended by 
section 121, is further amended--
            (1) in subparagraph (A), by striking ``Subject to 
        subparagraphs (C) and (D)'' and inserting ``Subject to 
        subparagraphs (C), (D), and (E)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Enrollee option regarding spreading cost-
                sharing.--
                            ``(i) In general.--The Secretary shall 
                        establish by regulation a process under which, 
                        with respect to plan year 2022 and subsequent 
                        plan years, a prescription drug plan or an MA-
                        PD plan shall, in the case of a part D eligible 
                        individual enrolled with such plan for such 
                        plan year with respect to whom the plan 
                        projects that the dispensing of a covered part 
                        D drug to such individual will result in the 
                        individual incurring costs within a 30-day 
                        period that are equal to a significant 
                        percentage (as specified by the Secretary 
                        pursuant to such regulation) of the annual out-
                        of-pocket threshold specified in paragraph 
                        (4)(B) for such plan year, provide such 
                        individual with the option to make the 
                        coinsurance payment required under subparagraph 
                        (A) for such costs in the form of equal monthly 
                        installments over the remainder of such plan 
                        year.
                            ``(ii) Significant percentage 
                        limitations.--In specifying a significant 
                        percentage pursuant to the regulation 
                        established by the Secretary under clause (i), 
                        the Secretary may not specify a percentage that 
                        is less than 30 percent or greater than 100 
                        percent.''.
    (b) Alternative Prescription Drug Coverage.--Section 1860D-2(c) of 
the Social Security Act (42 U.S.C. 1395w-102(c)) is amended by adding 
at the end the following new paragraph:
            ``(4) Same enrollee option regarding spreading cost-
        sharing.--For plan year 2022 and subsequent plan years, the 
        coverage provides the enrollee option regarding spreading cost-
        sharing described in and required under subsection 
        (b)(2)(E).''.

SEC. 133. ESTABLISHING A MONTHLY CAP ON BENEFICIARY INCURRED COSTS FOR 
              INSULIN PRODUCTS AND SUPPLIES UNDER A PRESCRIPTION DRUG 
              PLAN OR MA-PD PLAN.

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

SEC. 134. GROWTH RATE OF MEDICARE PART D OUT-OF-POCKET COST THRESHOLD.

    (a) Providing Medicare Part D Beneficiaries With Certain 2020 
Offset Payments.--Section 1860D-2(b)(4) of the Social Security Act (42 
U.S.C. 1395w-102(b)(4)) is amended by adding at the end the following 
new subparagraph:
                    ``(F) 2020 offset payments.--
                            ``(i) In general.--Subject to clause (iv), 
                        the Secretary shall provide for payment from 
                        the Medicare Prescription Drug Account as 
                        follows:
                                    ``(I) In the case of a specified 
                                individual (as defined in clause 
                                (ii)(I)) who as of the last day of a 
                                calendar quarter in 2020 has incurred 
                                costs for covered part D drugs so that 
                                the individual has exceeded the annual 
                                out-of-pocket threshold applied under 
                                subparagraph (B)(i)(V) for 2020, 
                                payment to the individual by not later 
                                than 15th day of the third month 
                                following the end of such quarter of 
                                the amount by which such threshold so 
                                applied exceeded the target threshold 
                                for 2020.
                                    ``(II) In the case of a specified 
                                individual who is not described in 
                                subclause (I) and who as of the last 
                                day of 2020 has incurred costs for 
                                covered part D drugs so that the 
                                individual has exceeded the target 
                                threshold for 2020, payment to the 
                                individual by not later than December 
                                31, 2021, of the amount by which such 
                                incurred costs exceeded the target 
                                threshold for 2020.
                            ``(ii) Definitions.--For purposes of this 
                        subparagraph:
                                    ``(I) Specified individual.--The 
                                term `specified individual' means an 
                                individual who--
                                            ``(aa) is enrolled in a 
                                        prescription drug plan or an 
                                        MA- PD plan;
                                            ``(bb) is not enrolled in a 
                                        qualified retiree prescription 
                                        drug plan; and
                                            ``(cc) is not entitled to 
                                        an income-related subsidy under 
                                        section 1860D-14(a).
                                    ``(II) Target threshold for 2020.--
                                The term `target threshold for 2020' 
                                means the annual out-of-pocket 
                                threshold that would have been applied 
                                under subparagraph (B)(i) for 2020 if 
                                such threshold had been determined in 
                                accordance with subclause (IV) of such 
                                subparagraph instead of subclause (V) 
                                of such subparagraph.
                            ``(iii) Notification.--In the case of any 
                        specified individual who during 2020 has 
                        incurred costs for covered part D drugs so that 
                        the individual has exceeded the target 
                        threshold for 2020, the Secretary shall, not 
                        later than September 30, 2021, provide to such 
                        individual a notification informing such 
                        individual of such individual's right to a 
                        payment described in clause (i) and the 
                        estimated timing of such payment.
                            ``(iv) Clarification.--The Secretary shall 
                        provide only 1 payment under this subparagraph 
                        with respect to any individual.
                            ``(v) Implementation.--The Secretary may 
                        implement this subparagraph by program 
                        instruction or otherwise.''.
    (b) Reduced Growth Rate for 2021 of Medicare Part D Out-of-Pocket 
Cost Threshold.--Section 1860D-2(b)(4)(B)(i) of the Social Security Act 
(42 U.S.C. 1395w-102(b)(4)(B)(i)) is amended--
            (1) in subclause (V), by striking at the end ``or'';
            (2) by redesignating subclause (VI) as subclause (VIII); 
        and
            (3) by inserting after subclause (V) the following new 
        subclauses:
                                    ``(VI) for 2021, is equal to the 
                                amount that would have been applied 
                                under this subparagraph for 2020 if 
                                such amount had been determined in 
                                accordance with subclause (IV) instead 
                                of subclause (V), increased by the 
                                lesser of--
                                            ``(aa) the annual 
                                        percentage increase described 
                                        in paragraph (7) for 2021, plus 
                                        2 percentage points; or
                                            ``(bb) the annual 
                                        percentage increase described 
                                        in paragraph (6) for 2021;
                                    ``(VII) for 2022, is equal to the 
                                amount that would have been applied 
                                under this subparagraph for 2022 if the 
                                amendments made by section 1101(d)(1) 
                                of the Health Care and Education 
                                Reconciliation Act of 2010 and by 
                                section 134 of the Lower Costs, More 
                                Cures Act of 2021 had not been enacted; 
                                or''.

                           TITLE II--MEDICAID

SEC. 201. MEDICAID PHARMACY AND THERAPEUTICS COMMITTEE IMPROVEMENTS.

    (a) In General.--Subparagraph (A) of section 1927(d)(4) of the 
Social Security Act (42 U.S.C. 1396r-8(d)(4)) is amended to read as 
follows:
                    ``(A)(i) The formulary is developed and reviewed by 
                a pharmacy and therapeutics committee consisting of 
                physicians, pharmacists, and other appropriate 
                individuals appointed by the Governor of the State.
                    ``(ii) Subject to clause (vi), the State 
                establishes and implements a conflict of interest 
                policy for the pharmacy and therapeutics committee 
                that--
                            ``(I) is publicly accessible;
                            ``(II) requires all committee members to 
                        complete, on at least an annual basis, a 
                        disclosure of relationships, associations, and 
                        financial dealings that may affect their 
                        independence of judgement in committee matters; 
                        and
                            ``(III) contains clear processes, such as 
                        recusal from voting or discussion, for those 
                        members who report a conflict of interest, 
                        along with appropriate processes to address any 
                        instance where a member fails to report a 
                        conflict of interest.
                    ``(iii) The membership of the pharmacy and 
                therapeutics committee--
                            ``(I) includes at least 1 actively 
                        practicing physician and at least 1 actively 
                        practicing pharmacist, each of whom--
                                    ``(aa) is independent and free of 
                                conflict with respect to manufacturers 
                                and Medicaid participating plans or 
                                subcontractors, including pharmacy 
                                benefit managers; and
                                    ``(bb) has expertise in the care of 
                                1 or more Medicaid-specific populations 
                                such as elderly or disabled 
                                individuals, children with complex 
                                medical needs, or low-income 
                                individuals with chronic illnesses; and
                            ``(II) is made publicly available.
                    ``(iv) At the option of the State, the State's drug 
                use review board established under subsection (g)(3) 
                may serve as the pharmacy and therapeutics committee 
                provided the State ensures that such board meets the 
                requirements of clauses (ii) and (iii).
                    ``(v) The State reviews and has final approval of 
                the formulary established by the pharmacy and 
                therapeutics committee.
                    ``(vi) If the Secretary determines it appropriate 
                or necessary based on the findings and recommendations 
                of the Comptroller General of the United States in the 
                report submitted to Congress under section 203 of the 
                Lower Costs, More Cures Act of 2021, the Secretary 
                shall issue guidance that States must follow for 
                establishing conflict of interest policies for the 
                pharmacy and therapeutics committee in accordance with 
                the requirements of clause (ii), including appropriate 
                standards and requirements for identifying, addressing, 
                and reporting on conflicts of interest.''.
    (b) Application to Medicaid Managed Care Organizations.--Clause 
(xiii) of section 1903(m)(2)(A) of the Social Security Act (42 U.S.C. 
1396b(m)(2)(A)) is amended--
            (1) by striking ``and (III)'' and inserting ``(III)'';
            (2) by striking the period at the end and inserting ``, and 
        (IV) any formulary used by the entity for covered outpatient 
        drugs dispensed to individuals eligible for medical assistance 
        who are enrolled with the entity is developed and reviewed by a 
        pharmacy and therapeutics committee that meets the requirements 
        of clauses (ii) and (iii) of section 1927(d)(4)(A).''; and
            (3) by moving the left margin 2 ems to the left.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.

SEC. 202. GAO REPORT ON CONFLICTS OF INTEREST IN STATE MEDICAID PROGRAM 
              DRUG USE REVIEW BOARDS AND PHARMACY AND THERAPEUTICS 
              (P&T) COMMITTEES.

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

SEC. 203. ENSURING THE ACCURACY OF MANUFACTURER PRICE AND DRUG PRODUCT 
              INFORMATION UNDER THE MEDICAID DRUG REBATE PROGRAM.

    (a) Audit of Manufacturer Price and Drug Product Information.--
            (1) In general.--Subparagraph (B) of section 1927(b)(3) of 
        the Social Security Act (42 U.S.C. 1396r-8(b)(3)) is amended to 
        read as follows:
                    ``(B) Audits and surveys of manufacturer price and 
                drug product information.--
                            ``(i) Audits.--The Secretary shall conduct 
                        ongoing audits of the price and drug product 
                        information reported by manufacturers under 
                        subparagraph (A) for the most recently ended 
                        rebate period to ensure the accuracy and 
                        timeliness of such information. In conducting 
                        such audits, the Secretary may employ 
                        evaluations, surveys, statistical sampling, 
                        predictive analytics and other relevant tools 
                        and methods.
                            ``(ii) Verifications surveys of average 
                        manufacturer price and manufacturer's average 
                        sales price.--In addition to the audits 
                        required under clause (i), the Secretary may 
                        survey wholesalers and manufacturers (including 
                        manufacturers that directly distribute their 
                        covered outpatient drugs (in this subparagraph 
                        referred to as `direct sellers')), when 
                        necessary, to verify manufacturer prices and 
                        manufacturer's average sales prices (including 
                        wholesale acquisition cost) to make payment 
                        reported under subparagraph (A).
                            ``(iii) Penalties.--In addition to other 
                        penalties as may be prescribed by law, 
                        including under subparagraph (C) of this 
                        paragraph, the Secretary may impose a civil 
                        monetary penalty in an amount not to exceed 
                        $185,000 on an annual basis on a wholesaler, 
                        manufacturer, or direct seller, if the 
                        wholesaler, manufacturer, or direct seller of a 
                        covered outpatient drug refuses a request for 
                        information about charges or prices by the 
                        Secretary in connection with an audit or survey 
                        under this subparagraph or knowingly provides 
                        false information. The provisions of section 
                        1128A (other than subsections (a) (with respect 
                        to amounts of penalties or additional 
                        assessments) and (b)) shall apply to a civil 
                        money penalty under this clause in the same 
                        manner as such provisions apply to a penalty or 
                        proceeding under section 1128A(a).
                            ``(iv) Reports.--
                                    ``(I) Report to congress.--The 
                                Secretary shall, not later than 18 
                                months after date of enactment of this 
                                subparagraph, submit a report to the 
                                Committee on Energy and Commerce of the 
                                House of Representatives and the 
                                Committee on Finance of the Senate 
                                regarding additional regulatory or 
                                statutory changes that may be required 
                                in order to ensure accurate and timely 
                                reporting and oversight of manufacturer 
                                price and drug product information, 
                                including whether changes should be 
                                made to reasonable assumption 
                                requirements to ensure such assumptions 
                                are reasonable and accurate or whether 
                                another methodology for ensuring 
                                accurate and timely reporting of price 
                                and drug product information should be 
                                considered to ensure the integrity of 
                                the drug rebate program under this 
                                section.
                                    ``(II) Annual reports.--The 
                                Secretary shall, on at least an annual 
                                basis, submit a report to the Committee 
                                on Energy and Commerce of the House of 
                                Representatives and the Committee on 
                                Finance of the Senate summarizing the 
                                results of the audits and surveys 
                                conducted under this subparagraph 
                                during the period that is the subject 
                                of the report.
                                    ``(III) Content.--Each report 
                                submitted under subclause (II) shall, 
                                with respect to the period that is the 
                                subject of the report, include 
                                summaries of--
                                            ``(aa) error rates in the 
                                        price, drug product, and other 
                                        relevant information supplied 
                                        by manufacturers under 
                                        subparagraph (A);
                                            ``(bb) the timeliness with 
                                        which manufacturers, 
                                        wholesalers, and direct sellers 
                                        provide information required 
                                        under subparagraph (A) or under 
                                        clause (i) or (ii) of this 
                                        subparagraph;
                                            ``(cc) the number of 
                                        manufacturers, wholesalers, and 
                                        direct sellers and drug 
                                        products audited under this 
                                        subparagraph;
                                            ``(dd) the types of price 
                                        and drug product information 
                                        reviewed under the audits 
                                        conducted under this 
                                        subparagraph;
                                            ``(ee) the tools and 
                                        methodologies employed in such 
                                        audits;
                                            ``(ff) the findings of such 
                                        audits, including which 
                                        manufacturers, if any, were 
                                        penalized under this 
                                        subparagraph; and
                                            ``(gg) such other relevant 
                                        information as the Secretary 
                                        shall deem appropriate.
                                    ``(IV) Protection of information.--
                                In preparing a report required under 
                                subclause (II), the Secretary shall 
                                redact such proprietary information as 
                                the Secretary determines appropriate to 
                                prevent disclosure of, and to 
                                safeguard, such information.
                            ``(v) Appropriations.--Out of any funds in 
                        the Treasury not otherwise appropriated, there 
                        is appropriated to the Secretary $2,000,000 for 
                        fiscal year 2022 and each fiscal year 
                        thereafter to carry out this subparagraph.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect on the first day of the first fiscal quarter 
        that begins after the date of enactment of this Act.
    (b) Increased Penalties for Noncompliance With Reporting 
Requirements.--
            (1) Increased penalty for late reporting of information.--
        Section 1927(b)(3)(C)(i) of the Social Security Act (42 U.S.C. 
        1396r-8(b)(3)(C)(i)) is amended by striking ``increased by 
        $10,000 for each day in which such information has not been 
        provided and such amount shall be paid to the Treasury'' and 
        inserting ``, for each covered outpatient drug with respect to 
        which such information is not provided, $50,000 for the first 
        day that such information is not provided on a timely basis and 
        $19,000 for each subsequent day that such information is not 
        provided''.
            (2) Increased penalty for knowingly reporting false 
        information.--Section 1927(b)(3)(C)(ii) of the Social Security 
        Act (42 U.S.C. 1396r-8(b)(3)(C)(ii)) is amended by striking 
        ``$100,000'' and inserting ``$500,000''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the first day of the first fiscal quarter 
        that begins after the date of enactment of this Act.

SEC. 204. IMPROVING TRANSPARENCY AND PREVENTING THE USE OF ABUSIVE 
              SPREAD PRICING AND RELATED PRACTICES IN MEDICAID.

    (a) Pass-Through Pricing Required.--
            (1) In general.--Section 1927(e) of the Social Security Act 
        (42 U.S.C. 1396r-8(e)) is amended by adding at the end the 
        following:
            ``(6) Pass-through pricing required.--A contract between 
        the State and a pharmacy benefit manager (referred to in this 
        paragraph as a `PBM'), or a contract between the State and a 
        managed care entity or other specified entity (as such terms 
        are defined in section 1903(m)(9)(D)) that includes provisions 
        making the entity responsible for coverage of covered 
        outpatient drugs dispensed to individuals enrolled with the 
        entity, shall require that payment for such drugs and related 
        administrative services (as applicable), including payments 
        made by a PBM on behalf of the State or entity, is based on a 
        pass-through pricing model under which--
                    ``(A) any payment made by the entity of the PBM (as 
                applicable) for such a drug--
                            ``(i) is limited to--
                                    ``(I) ingredient cost; and
                                    ``(II) a professional dispensing 
                                fee that is not less than the 
                                professional dispensing fee that the 
                                State plan or waiver would pay if the 
                                plan or waiver was making the payment 
                                directly;
                            ``(ii) is passed through in its entirety by 
                        the entity or PBM to the pharmacy that 
                        dispenses the drug; and
                            ``(iii) is made in a manner that is 
                        consistent with section 1902(a)(30)(A) and 
                        sections 447.512, 447.514, and 447.518 of title 
                        42, Code of Federal Regulations (or any 
                        successor regulation), as if such requirements 
                        applied directly to the entity or the PBM;
                    ``(B) payment to the entity or the PBM (as 
                applicable) for administrative services performed by 
                the entity or PBM is limited to a reasonable 
                administrative fee that covers the reasonable cost of 
                providing such services;
                    ``(C) the entity or the PBM (as applicable) shall 
                make available to the State, and the Secretary upon 
                request, all costs and payments related to covered 
                outpatient drugs and accompanying administrative 
                services incurred, received, or made by the entity or 
                the PBM, including ingredient costs, professional 
                dispensing fees, administrative fees, post-sale and 
                post-in-voice fees. Discounts, or related adjustments 
                such as direct and indirect remuneration fees, and any 
                and all remuneration; and
                    ``(D) any form of spread pricing whereby any amount 
                charged or claimed by the entity or the PBM (as 
                applicable) is in excess of the amount paid to the 
                pharmacies on behalf of the entity, including any post-
                sale or post-invoice fees, discounts, or related 
                adjustments such as direct and indirect remuneration 
                fees or assessments (after allowing for a reasonable 
                administrative fee as described in subparagraph (B)) is 
                not allowable for purposes of claiming Federal matching 
                payments under this title.''.
            (2) Conforming amendment.--Clause (xiii) of section 
        1903(m)(2)(A) of such Act (42 U.S.C. 1396b(m)(2)(A)), as 
        amended by section 202, is further amended--
                    (A) by striking ``and (IV)'' and inserting 
                ``(IV)''; and
                    (B) by inserting before the period at the end the 
                following: ``, and (V) pharmacy benefit management 
                services provided by the entity, or provided by a 
                pharmacy benefit manager on behalf of the entity under 
                a contract or other arrangement between the entity and 
                the pharmacy benefit manager, shall comply with the 
                requirements of section 1927(e)(6)''.
            (3) Effective date.--The amendments made by this subsection 
        apply to contracts between States and managed care entities, 
        other specified entities, or pharmacy benefits managers that 
        are entered into or renewed on or after the date that is 18 
        months after the date of enactment of this Act.
    (b) Survey of Retail Prices.--
            (1) In general.--Section 1927(f) of the Social Security Act 
        (42 U.S.C. 1396r-8(f)) is amended--
                    (A) by striking ``and'' after the semicolon at the 
                end of paragraph (1)(A)(i) and all that precedes it 
                through ``(1)'' and inserting the following:
            ``(1) Survey of retail prices.--The Secretary shall conduct 
        a survey of retail community drug prices, to include at least 
        the national average drug acquisition cost, as follows:
                    ``(A) Use of vendor.--The Secretary may contract 
                services for--
                            ``(i) with respect to retail community 
                        pharmacies, the determination on a monthly 
                        basis of retail survey prices of the national 
                        average drug acquisition cost for covered 
                        outpatient drugs for such pharmacies, net of 
                        all discounts and rebates (to the extent any 
                        information with respect to such discounts and 
                        rebates is available), the average 
                        reimbursement received for such drugs by such 
                        pharmacies from all sources of payment, 
                        including third parties, and, to the extent 
                        available, the usual and customary charges to 
                        consumers for such drugs; and'';
                    (B) by adding at the end of paragraph (1) the 
                following:
                    ``(F) Survey reporting.--In order to meet the 
                requirement of section 1902(a)(54), a State shall 
                require that any retail community pharmacy in the State 
                that receives any payment, administrative fee, 
                discount, or rebate related to the dispensing of 
                covered outpatient drugs to individuals receiving 
                benefits under this title, regardless of whether such 
                payment, fee, discount, or rebate is received from the 
                State or a managed care entity directly or from a 
                pharmacy benefit manager or another entity that has a 
                contract with the State or a managed care entity, shall 
                respond to surveys of retail prices conducted under 
                this subsection.
                    ``(G) Survey information.--Information on retail 
                community prices obtained under this paragraph shall be 
                made publicly available and shall include at least the 
                following:
                            ``(i) The monthly response rate of the 
                        survey including a list of pharmacies not in 
                        compliance with subparagraph (F).
                            ``(ii) The sampling frame and number of 
                        pharmacies sampled monthly.
                            ``(iii) Characteristics of reporting 
                        pharmacies, including type (such as independent 
                        or chain), geographic or regional location, and 
                        dispensing volume.
                            ``(iv) Reporting of a separate national 
                        average drug acquisition cost for each drug for 
                        independent retail pharmacies and chain 
                        operated pharmacies.
                            ``(v) Information on price concessions 
                        including on and off invoice discounts, 
                        rebates, and other price concessions.
                            ``(vi) Information on average professional 
                        dispensing fees paid.
                    ``(H) Penalties.--
                            ``(i) Failure to provide timely 
                        information.--A retail community pharmacy that 
                        fails to respond to a survey conducted under 
                        this subsection on a timely basis may be 
                        subject to a civil monetary penalty in the 
                        amount of $10,000 for each day in which such 
                        information has not been provided.
                            ``(ii) False information.--A retail 
                        community pharmacy that knowingly provides 
                        false information in response to a survey 
                        conducted under this subsection may be subject 
                        to a civil money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information.
                            ``(iii) Other penalties.--Any civil money 
                        penalties imposed under this subparagraph shall 
                        be in addition to other penalties as may be 
                        prescribed by law. The provisions of section 
                        1128A (other than subsections (a) and (b)) 
                        shall apply to a civil money penalty under this 
                        subparagraph in the same manner as such 
                        provisions apply to a penalty or proceedings 
                        under section 1128A(a).
                    ``(I) Report on specialty pharmacies.--
                            ``(i) In general.--Not later than 1 year 
                        after the effective date of this subparagraph, 
                        the Secretary shall submit a report to Congress 
                        examining specialty drug coverage and 
                        reimbursement under this title.
                            ``(ii) Content of report.--Such report 
                        shall include a description of how State 
                        Medicaid programs define specialty drugs, how 
                        much State Medicaid programs pay for specialty 
                        drugs, how States and managed care plans 
                        determine payment for specialty drugs, the 
                        settings in which specialty drugs are dispensed 
                        (such as retail community pharmacies or 
                        specialty pharmacies), whether acquisition 
                        costs for specialty drugs are captured in the 
                        national average drug acquisition cost survey, 
                        and recommendations as to whether specialty 
                        pharmacies should be included in the survey of 
                        retail prices to ensure national average drug 
                        acquisition costs capture drugs sold at 
                        specialty pharmacies and how such specialty 
                        pharmacies should be defined.'';
                    (C) in paragraph (2)--
                            (i) in subparagraph (A), by inserting ``, 
                        including payments rates under Medicaid managed 
                        care plans,'' after ``under this title''; and
                            (ii) in subparagraph (B), by inserting 
                        ``and the basis for such dispensing fees'' 
                        before the semicolon; and
                    (D) in paragraph (4), by inserting ``, and 
                $5,000,000 for fiscal year 2022 and each fiscal year 
                thereafter,'' after ``2010''.
            (2) Effective date.--The amendments made by this subsection 
        take effect on the 1st day of the 1st quarter that begins on or 
        after the date that is 18 months after the date of enactment of 
        this Act.
    (c) Manufacturer Reporting of Wholesale Acquisition Cost.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)), as amended by section 
141, is further amended--
            (1) in subparagraph (A)(i)--
                    (A) in subclause (I), by striking ``and'' after the 
                semicolon;
                    (B) in subclause (II), by adding ``and'' after the 
                semicolon;
                    (C) by moving the left margins of subclauses (I) 
                and (II) 2 ems to the right; and
                    (D) by adding at the end the following:
                                    ``(III) in the case of rebate 
                                periods that begin on or after the date 
                                of enactment of this subclause, on the 
                                wholesale acquisition cost (as defined 
                                in section 1847A(c)(6)(B)) for covered 
                                outpatient drugs for the rebate period 
                                under the agreement (including for all 
                                such drugs that are sold under a new 
                                drug application approved under section 
                                505(c) of the Federal Food, Drug, and 
                                Cosmetic Act);''; and
            (2) in subparagraph (D)--
                    (A) in the matter preceding clause (i), by 
                inserting ``and clause (vii) of this subparagraph'' 
                after ``1847A'';
                    (B) in clause (vi), by striking ``and'' after the 
                comma;
                    (C) in clause (vii), by striking the period and 
                inserting ``, and''; and
                    (D) by inserting after clause (vii) the following:
                            ``(viii) to the Secretary to disclose 
                        (through a website accessible to the public) 
                        the most recently reported wholesale 
                        acquisition cost (as defined in section 
                        1847A(c)(6)(B)) for each covered outpatient 
                        drug (including for all such drugs that are 
                        sold under a new drug application approved 
                        under section 505(c) of the Federal Food, Drug, 
                        and Cosmetic Act), as reported under 
                        subparagraph (A)(i)(III).''.

SEC. 205. T-MSIS DRUG DATA ANALYTICS REPORTS.

    (a) In General.--Not later than May 1 of each calendar year 
beginning with calendar year 2023, the Secretary of Health and Human 
Services (in this section referred to as the ``Secretary'') shall 
publish on a website of the Centers for Medicare & Medicaid Services 
that is accessible to the public a report of the most recently 
available data on provider prescribing patterns under the Medicaid 
program.
    (b) Content of Report.--
            (1) Required content.--Each report required under 
        subsection (a) for a calendar year shall include the following 
        information with respect to each State (and, to the extent 
        available, with respect to Puerto Rico, the United States 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa):
                    (A) A comparison of covered outpatient drug (as 
                defined in section 1927(k)(2) of the Social Security 
                Act (42 U.S.C. 1396r-8(k)(2))) prescribing patterns 
                under the State Medicaid plan or waiver of such plan 
                (including drugs prescribed on a fee-for-service basis 
                and drugs prescribed under managed care arrangements 
                under such plan or waiver)--
                            (i) across all forms or models of 
                        reimbursement used under the plan or waiver;
                            (ii) within specialties and subspecialties, 
                        as defined by the Secretary;
                            (iii) by episodes of care for--
                                    (I) each chronic disease category, 
                                as defined by the Secretary, that is 
                                represented in the 10 conditions that 
                                accounted for the greatest share of 
                                total spending under the plan or waiver 
                                during the year that is the subject of 
                                the report;
                                    (II) procedural groupings; and
                                    (III) rare disease diagnosis codes;
                            (iv) by patient demographic 
                        characteristics, including race (to the extent 
                        that the Secretary determines that there is 
                        sufficient data available with respect to such 
                        characteristic in a majority of States), 
                        gender, and age;
                            (v) by patient high-utilizer or risk 
                        status; and
                            (vi) by high and low resource settings by 
                        facility and place of service categories, as 
                        determined by the Secretary.
                    (B) In the case of medical assistance for covered 
                outpatient drugs (as so defined) provided under a State 
                Medicaid plan or waiver of such plan in a managed care 
                setting, an analysis of the differences in managed care 
                prescribing patterns when a covered outpatient drug is 
                prescribed in a managed care setting as compared to 
                when the drug is prescribed in a fee-for-service 
                setting.
            (2) Additional content.--A report required under subsection 
        (a) for a calendar year may include State-specific information 
        about prescription utilization management tools under State 
        Medicaid plans or waivers of such plans, including--
                    (A) a description of prescription utilization 
                management tools under State programs to provide long-
                term services and supports under a State Medicaid plan 
                or a waiver of such plan;
                    (B) a comparison of prescription utilization 
                management tools applicable to populations covered 
                under a State Medicaid plan waiver under section 1115 
                of the Social Security Act (42 U.S.C. 1315) and the 
                models applicable to populations that are not covered 
                under the waiver;
                    (C) a comparison of the prescription utilization 
                management tools employed by different Medicaid managed 
                care organizations, pharmacy benefit managers, and 
                related entities within the State;
                    (D) a comparison of the prescription utilization 
                management tools applicable to each enrollment category 
                under a State Medicaid plan or waiver; and
                    (E) a comparison of the prescription utilization 
                management tools applicable under the State Medicaid 
                plan or waiver by patient high-utilizer or risk status.
            (3) Additional analysis.--To the extent practicable, the 
        Secretary shall include in each report published under 
        subsection (a)--
                    (A) analyses of national, State, and local patterns 
                of Medicaid population-based prescribing behaviors; and
                    (B) recommendations for administrative or 
                legislative action to improve the effectiveness of, and 
                reduce costs for, covered outpatient drugs under 
                Medicaid while ensuring timely beneficiary access to 
                medically necessary covered outpatient drugs.
    (c) Use of T-MSIS Data.--Each report required under subsection (a) 
shall--
            (1) be prepared using data and definitions from the 
        Transformed Medicaid Statistical Information System (T-MSIS) 
        data set (or a successor data set) that is not more than 24 
        months old on the date that the report is published; and
            (2) as appropriate, include a description with respect to 
        each State of the quality and completeness of the data, as well 
        as any necessary caveats describing the limitations of the data 
        reported to the Secretary by the State that are sufficient to 
        communicate the appropriate uses for the information.
    (d) Preparation of Report.--Each report required under subsection 
(a) shall be prepared by the Administrator for the Centers for Medicare 
& Medicaid Services.
    (e) Appropriation.--For fiscal year 2022 and each fiscal year 
thereafter, there is appropriated to the Secretary $2,000,000 to carry 
out this section.

SEC. 206. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED 
              OUTPATIENT DRUGS UNDER MEDICAID.

    (a) In General.--Section 1927 of the Social Security Act (42 U.S.C. 
1396r-8) is amended by adding at the end the following new subsection:
    ``(l) State Option To Pay for Covered Outpatient Drugs Through 
Risk-Sharing Value-Based Agreements.--
            ``(1) In general.--Beginning January 1, 2022, a State shall 
        have the option to pay (whether on a fee-for-service or managed 
        care basis) for covered outpatient drugs that are potentially 
        curative treatments intended for one-time use that are 
        administered to individuals under this title by entering into a 
        risk-sharing value-based payment agreement with the 
        manufacturer of the drug in accordance with the requirements of 
        this subsection.
            ``(2) Secretarial approval.--
                    ``(A) In general.--A State shall submit a request 
                to the Secretary to enter into a risk-sharing value 
                based payment agreement, and the Secretary shall not 
                approve a proposed risk-sharing value-based payment 
                agreement between a State and a manufacturer for 
                payment for a covered outpatient drug of the 
                manufacturer unless the following requirements are met:
                            ``(i) Manufacturer is party to rebate 
                        agreement and in compliance with 
                        requirements.--The manufacturer has a rebate 
                        agreement in effect as required under 
                        subsections (a) and (b) of this section and is 
                        in compliance with all applicable requirements 
                        under this title.
                            ``(ii) No increase to projected net federal 
                        spending.--
                                    ``(I) In general.--The Chief 
                                Actuary certifies that the projected 
                                payments for each covered outpatient 
                                drug under such proposed agreement 
                                would not result in greater estimated 
                                Federal spending under this title than 
                                the net Federal spending that would 
                                result in the absence of the agreement.
                                    ``(II) Net federal spending 
                                defined.--For purposes of this 
                                subsection, the term `net Federal 
                                spending' means the amount of Federal 
                                payments the Chief Actuary estimates 
                                would be made under this title for 
                                administering a covered outpatient drug 
                                to an individual eligible for medical 
                                assistance under a State plan or a 
                                waiver of such plan, reduced by the 
                                amount of all rebates the Chief Actuary 
                                estimates would be paid with respect to 
                                the administering of such drug, 
                                including all rebates under this title 
                                and any supplemental or other 
                                additional rebates, in the absence of 
                                such an agreement.
                                    ``(III) Information.--The Chief 
                                Actuary shall make the certifications 
                                required under this clause based on the 
                                most recently available and reliable 
                                drug pricing and product information. 
                                The State and manufacturer shall 
                                provide the Secretary and the Chief 
                                Actuary with all necessary information 
                                required to make the estimates needed 
                                for such certifications.
                            ``(iii) Launch and list price 
                        justifications.--The manufacturer submits all 
                        relevant information and supporting 
                        documentation necessary for pricing decisions 
                        as deemed appropriate by the Secretary, which 
                        shall be truthful and non-misleading, including 
                        manufacturer information and supporting 
                        documentation for launch price or list price 
                        increases, and any applicable justification 
                        required under section 1128L.
                            ``(iv) Confidentiality of information; 
                        penalties.--The provisions of subparagraphs (C) 
                        and (D) of subsection (b)(3) shall apply to a 
                        manufacturer that fails to submit the 
                        information and documentation required under 
                        clauses (ii) and (iii) on a timely basis, or 
                        that knowingly provides false or misleading 
                        information, in the same manner as such 
                        provisions apply to a manufacturer with a 
                        rebate agreement under this section.
                    ``(B) Consideration of state request for 
                approval.--
                            ``(i) In general.--The Secretary shall 
                        treat a State request for approval of a risk-
                        sharing value-based payment agreement in the 
                        same manner that the Secretary treats a State 
                        plan amendment, and subpart B of part 430 of 
                        title 42, Code of Federal Regulations, 
                        including, subject to clause (ii), the timing 
                        requirements of section 430.16 of such title 
                        (as in effect on the date of enactment of this 
                        subsection), shall apply to a request for 
                        approval of a risk-sharing value-based payment 
                        agreement in the same manner as such subpart 
                        applies to a State plan amendment.
                            ``(ii) Timing.--The Secretary shall consult 
                        with the Commissioner of Food and Drugs as 
                        required under subparagraph (C) and make a 
                        determination on whether to approve a request 
                        from a State for approval of a proposed risk-
                        sharing value-based payment agreement (or 
                        request additional information necessary to 
                        allow the Secretary to make a determination 
                        with respect to such request for approval) 
                        within the time period, to the extent 
                        practicable, specified in section 430.16 of 
                        title 42, Code of Federal Regulations (as in 
                        effect on the date of enactment of this 
                        subsection), but in no case shall the Secretary 
                        take more than 180 days after the receipt of 
                        such request for approval or response to such 
                        request for additional information to make such 
                        a determination (or request additional 
                        information).
                    ``(C) Consultation with the commissioner of food 
                and drugs.--In considering whether to approve a risk-
                sharing value-based payment agreement, the Secretary, 
                to the extent necessary, shall consult with the 
                Commissioner of Food and Drugs to determine whether the 
                relevant clinical parameters specified in such 
                agreement are appropriate.
            ``(3) Installment-based payment structure.--
                    ``(A) In general.--A risk-sharing value-based 
                payment agreement shall provide for a payment structure 
                under which, for every installment year of the 
                agreement (subject to subparagraph (B)), the State 
                shall pay the total installment year amount in equal 
                installments to be paid at regular intervals over a 
                period of time that shall be specified in the 
                agreement.
                    ``(B) Requirements for installment payments.--
                            ``(i) Timing of first payment.--The State 
                        shall make the first of the installment 
                        payments described in subparagraph (A) for an 
                        installment year not later than 30 days after 
                        the end of such year.
                            ``(ii) Length of installment period.--The 
                        period of time over which the State shall make 
                        the installment payments described in 
                        subparagraph (A) for an installment year shall 
                        not be longer than 5 years.
                            ``(iii) Nonpayment or reduced payment of 
                        installments following a failure to meet 
                        clinical parameter.--If, prior to the payment 
                        date (as specified in the agreement) of any 
                        installment payment described in subparagraph 
                        (A) or any other alternative date or time frame 
                        (as otherwise specified in the agreement), the 
                        covered outpatient drug which is subject to the 
                        agreement fails to meet a relevant clinical 
                        parameter of the agreement, the agreement shall 
                        provide that--
                                    ``(I) the installment payment shall 
                                not be made; or
                                    ``(II) the installment payment 
                                shall be reduced by a percentage 
                                specified in the agreement that is 
                                based on the outcome achieved by the 
                                drug relative to the relevant clinical 
                                parameter.
            ``(4) Notice of intent.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                manufacturer of a covered outpatient drug shall not be 
                eligible to enter into a risk-sharing value-based 
                payment agreement under this subsection with respect to 
                such drug unless the manufacturer notifies the 
                Secretary that the manufacturer is interested in 
                entering into such an agreement with respect to such 
                drug. The decision to submit and timing of a request to 
                enter into a proposed risk-sharing value-based payment 
                agreement shall remain solely within the discretion of 
                the State and shall only be effective upon Secretarial 
                approval as required under this subsection.
                    ``(B) Treatment of subsequently approved drugs.--
                            ``(i) In general.--In the case of a 
                        manufacturer of a covered outpatient drug 
                        approved under section 505 of the Federal Food, 
                        Drug, and Cosmetic Act or licensed under 
                        section 351 of the Public Health Service Act 
                        after the date of enactment of this subsection, 
                        not more than 90 days after meeting with the 
                        Food and Drug Administration following phase II 
                        clinical trials for such drug (or, in the case 
                        of a drug described in clause (ii), not later 
                        than March 31, 2022), the manufacturer must 
                        notify the Secretary of the manufacturer's 
                        intent to enter into a risk-sharing value-based 
                        payment agreement under this subsection with 
                        respect to such drug. If no such meeting has 
                        occurred, the Secretary may use discretion as 
                        to whether a potentially curative treatment 
                        intended for one-time use may qualify for a 
                        risk-sharing value-based payment agreement 
                        under this section. A manufacturer notification 
                        of interest shall not have any influence on a 
                        decision for approval by the Food and Drug 
                        Administration.
                            ``(ii) Application to certain subsequently 
                        approved drugs.--A drug described in this 
                        clause is a covered outpatient drug of a 
                        manufacturer--
                                    ``(I) that is approved under 
                                section 505 of the Federal Food, Drug, 
                                and Cosmetic Act or licensed under 
                                section 351 of the Public Health 
                                Service Act after the date of enactment 
                                of this subsection; and
                                    ``(II) with respect to which, as of 
                                January 1, 2022, more than 90 days have 
                                passed after the manufacturer's meeting 
                                with the Food and Drug Administration 
                                following phase II clinical trials for 
                                such drug.
                            ``(iii) Parallel approval.--The Secretary, 
                        in coordination with the Administrator of the 
                        Centers for Medicare & Medicaid Services and 
                        the Commissioner of Food and Drugs, shall, to 
                        the extent practicable, approve a State's 
                        request to enter into a proposed risk-sharing 
                        value-based payment agreement that otherwise 
                        meets the requirements of this subsection at 
                        the time that such a drug is approved by the 
                        Food and Drug Administration to help provide 
                        that no State that wishes to enter into such an 
                        agreement is required to pay for the drug in 
                        full at one time if the State is seeking to pay 
                        over a period of time as outlined in the 
                        proposed agreement.
                            ``(iv) Rule of construction.--Nothing in 
                        this paragraph shall be applied or construed to 
                        modify or affect the timeframes or factors 
                        involved in the Secretary's determination of 
                        whether to approve or license a drug under 
                        section 505 of the Federal Food, Drug, and 
                        Cosmetic Act or section 351 of the Public 
                        Health Service Act.
            ``(5) Special payment rules.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, with respect to an individual who is 
                administered a unit of a covered outpatient drug that 
                is purchased under a State plan by a State Medicaid 
                agency under a risk-sharing value-based payment 
                agreement in an installment year, the State shall 
                remain liable to the manufacturer of such drug for 
                payment for such unit without regard to whether the 
                individual remains enrolled in the State plan under 
                this title (or a waiver of such plan) for each 
                installment year for which the State is to make 
                installment payments for covered outpatient drugs 
                purchased under the agreement in such year.
                    ``(B) Death.--In the case of an individual 
                described in subparagraph (A) who dies during the 
                period described in such subparagraph, the State plan 
                shall not be liable for any remaining payment for the 
                unit of the covered outpatient drug administered to the 
                individual which is owed under the agreement described 
                in such subparagraph.
                    ``(C) Withdrawal of approval.--In the case of a 
                covered outpatient drug that is the subject of a risk-
                sharing value-based agreement between a State and a 
                manufacturer under this subsection, including a drug 
                approved in accordance with section 506(c) of the 
                Federal Food, Drug, and Cosmetic Act, and such drug is 
                the subject of an application that has been withdrawn 
                by the Secretary, the State plan shall not be liable 
                for any remaining payment that is owed under the 
                agreement.
                    ``(D) Alternative arrangement under agreement.--
                Subject to approval by the Secretary, the terms of a 
                proposed risk-sharing value-based payment agreement 
                submitted for approval by a State may provide that 
                subparagraph (A) shall not apply.
                    ``(E) Guidance.--Not later than January 1, 2022, 
                the Secretary shall issue guidance to States 
                establishing a process for States to notify the 
                Secretary when an individual who is administered a unit 
                of a covered outpatient drug that is purchased by a 
                State plan under a risk-sharing value-based payment 
                agreement ceases to be enrolled under the State plan 
                under this title (or a waiver of such plan) or dies 
                before the end of the installment period applicable to 
                such unit under the agreement.
            ``(6) Treatment of payments under risk-sharing value-based 
        agreements for purposes of average manufacturer price; best 
        price.--The Secretary shall treat any payments made to the 
        manufacturer of a covered outpatient drug under a risk-sharing 
        value-based payment agreement under this subsection during a 
        rebate period in the same manner that the Secretary treats 
        payments made under a State supplemental rebate agreement under 
        sections 447.504(c)(19) and 447.505(c)(7) of title 42, Code of 
        Federal Regulations (or any successor regulations), for 
        purposes of determining average manufacturer price and best 
        price under this section with respect to the covered outpatient 
        drug and a rebate period and for purposes of offsets required 
        under subsection (b)(1)(B).
            ``(7) Assessments and report to congress.--
                    ``(A) Assessments.--
                            ``(i) In general.--Not later than 180 days 
                        after the end of each assessment period of any 
                        risk-sharing value-based payment agreement for 
                        a State approved under this subsection, the 
                        Secretary shall conduct an evaluation of such 
                        agreement which shall include an evaluation by 
                        the Chief Actuary to determine whether program 
                        spending under the risk-sharing value-based 
                        payment agreement aligned with the projections 
                        for the agreement made under paragraph 
                        (2)(A)(ii), including an assessment of whether 
                        actual Federal spending under this title under 
                        the agreement was less or more than net Federal 
                        spending would have been in the absence of the 
                        agreement.
                            ``(ii) Assessment period.--For purposes of 
                        clause (i)--
                                    ``(I) the first assessment period 
                                for a risk-sharing value-based payment 
                                agreement shall be the period of time 
                                over which payments are scheduled to be 
                                made under the agreement for the first 
                                10 individuals who are administered 
                                covered outpatient drugs under the 
                                agreement except that such period shall 
                                not exceed the 5-year period after the 
                                date on which the Secretary approves 
                                the agreement; and
                                    ``(II) each subsequent assessment 
                                period for a risk-sharing value-based 
                                payment agreement shall be the 5-year 
                                period following the end of the 
                                previous assessment period.
                    ``(B) Results of assessments.--
                            ``(i) Termination option.--If the Secretary 
                        determines as a result of the assessment by the 
                        Chief Actuary under subparagraph (A) that the 
                        actual Federal spending under this title for 
                        any covered outpatient drug that was the 
                        subject of the State's risk-sharing value-based 
                        payment agreement was greater than the net 
                        Federal spending that would have resulted in 
                        the absence of the agreement, the Secretary may 
                        terminate approval of such agreement and shall 
                        immediately conduct an assessment under this 
                        paragraph of any other ongoing risk-sharing 
                        value-based payment agreement to which the same 
                        manufacturer is a party.
                            ``(ii) Repayment required.--
                                    ``(I) In general.--If the Secretary 
                                determines as a result of the 
                                assessment by the Chief Actuary under 
                                subparagraph (A) that the Federal 
                                spending under the risk-sharing value-
                                based agreement for a covered 
                                outpatient drug that was subject to 
                                such agreement was greater than the net 
                                Federal spending that would have 
                                resulted in the absence of the 
                                agreement, the manufacturer shall repay 
                                the difference to the State and Federal 
                                governments in a timely manner as 
                                determined by the Secretary.
                                    ``(II) Termination for failure to 
                                pay.--The failure of a manufacturer to 
                                make repayments required under 
                                subclause (I) in a timely manner shall 
                                result in immediate termination of all 
                                risk-sharing value-based agreements to 
                                which the manufacturer is a party.
                                    ``(III) Additional penalties.--In 
                                the case of a manufacturer that fails 
                                to make repayments required under 
                                subclause (I), the Secretary may treat 
                                such manufacturer in the same manner as 
                                a manufacturer that fails to pay 
                                required rebates under this section, 
                                and the Secretary may--
                                            ``(aa) suspend or terminate 
                                        the manufacturer's rebate 
                                        agreement under this section; 
                                        and
                                            ``(bb) pursue any other 
                                        remedy that would be available 
                                        if the manufacturer had failed 
                                        to pay required rebates under 
                                        this section.
                    ``(C) Report to congress.--Not later than 5 years 
                after the first risk-sharing value-based payment 
                agreement is approved under this subsection, the 
                Secretary shall submit to Congress and make available 
                to the public a report that includes--
                            ``(i) an assessment of the impact of risk-
                        sharing value-based payment agreements on 
                        access for individuals who are eligible for 
                        benefits under a State plan or waiver under 
                        this title to medically necessary covered 
                        outpatient drugs and related treatments;
                            ``(ii) an analysis of the impact of such 
                        agreements on overall State and Federal 
                        spending under this title;
                            ``(iii) an assessment of the impact of such 
                        agreements on drug prices, including launch 
                        price and price increases; and
                            ``(iv) such recommendations to Congress as 
                        the Secretary deems appropriate.
            ``(8) Guidance and regulations.--
                    ``(A) In general.--Not later than January 1, 2022, 
                the Secretary shall issue guidance to States seeking to 
                enter into risk-sharing value-based payment agreements 
                under this subsection that includes a model template 
                for such agreements. The Secretary may issue any 
                additional guidance or promulgate regulations as 
                necessary to implement and enforce the provisions of 
                this subsection.
                    ``(B) Model agreements.--
                            ``(i) In general.--If a State expresses an 
                        interest in pursuing a risk-sharing value-based 
                        payment agreement under this subsection with a 
                        manufacturer for the purchase of a covered 
                        outpatient drug, the Secretary may share with 
                        such State any risk-sharing value-based 
                        agreement between a State and the manufacturer 
                        for the purchase of such drug that has been 
                        approved under this subsection. While such 
                        shared agreement may serve as a template for a 
                        State that wishes to propose, the use of a 
                        previously approved agreement shall not affect 
                        the submission and approval process for 
                        approval of a proposed risk-sharing value-based 
                        payment agreement under this subsection, 
                        including the requirements under paragraph 
                        (2)(A).
                            ``(ii) Confidentiality.--In the case of a 
                        risk-sharing value-based payment agreement that 
                        is disclosed to a State by the Secretary under 
                        this subparagraph and that is only in effect 
                        with respect to a single State, the 
                        confidentiality of information provisions 
                        described in subsection (b)(3)(D) shall apply 
                        to such information.
                    ``(C) OIG consultation.--
                            ``(i) In general.--The Secretary shall 
                        consult with the Office of the Inspector 
                        General of the Department of Health and Human 
                        Services to determine whether there are 
                        potential program integrity concerns with 
                        agreement approvals or templates and address 
                        accordingly.
                            ``(ii) OIG policy updates as necessary.--
                        The Inspector General of the Department of 
                        Health and Human Services shall review and 
                        update, as necessary, any policies or 
                        guidelines of the Office of the Inspector 
                        General of the Department of Human Services 
                        (including policies related to the enforcement 
                        of section 1128B) to accommodate the use of 
                        risk-sharing value-based payment agreements in 
                        accordance with this section.
            ``(9) Rules of construction.--
                    ``(A) Modifications.--Nothing in this subsection or 
                any regulations promulgated under this subsection shall 
                prohibit a State from requesting a modification from 
                the Secretary to the terms of a risk-sharing value-
                based payment agreement. A modification that is 
                expected to result in any increase to projected net 
                State or Federal spending under the agreement shall be 
                subject to recertification by the Chief Actuary as 
                described in paragraph (2)(A)(ii) before the 
                modification may be approved.
                    ``(B) Rebate agreements.--Nothing in this 
                subsection shall be construed as requiring a State to 
                enter into a risk-sharing value-based payment agreement 
                or as limiting or superseding the ability of a State to 
                enter into a supplemental rebate agreement for a 
                covered outpatient drug.
                    ``(C) FFP for payments under risk-sharing value-
                based payment agreements.--Federal financial 
                participation shall be available under this title for 
                any payment made by a State to a manufacturer for a 
                covered outpatient drug under a risk-sharing value-
                based payment agreement in accordance with this 
                subsection, except that no Federal financial 
                participation shall be available for any payment made 
                by a State to a manufacturer under such an agreement on 
                and after the effective date of a disapproval of such 
                agreement by the Secretary.
                    ``(D) Continued application of other provisions.--
                Except as expressly provided in this subsection, 
                nothing in this subsection or in any regulations 
                promulgated under this subsection shall affect the 
                application of any other provision of this Act.
            ``(10) Appropriations.--For fiscal year 2022 and each 
        fiscal year thereafter, there are appropriated to the Secretary 
        $5,000,000 for the purpose of carrying out this subsection.
            ``(11) Definitions.--In this subsection:
                    ``(A) Chief actuary.--The term `Chief Actuary' 
                means the Chief Actuary of the Centers for Medicare & 
                Medicaid Services.
                    ``(B) Installment year.--The term `installment 
                year' means, with respect to a risk-sharing value-based 
                payment agreement, a 12-month period during which a 
                covered outpatient drug is administered under the 
                agreement.
                    ``(C) Potentially curative treatment intended for 
                one-time use.--The term `potentially curative treatment 
                intended for one-time use' means a treatment that 
                consists of the administration of a covered outpatient 
                drug that--
                            ``(i) is a form of gene therapy for a rare 
                        disease, as defined by the Commissioner of Food 
                        and Drugs, designated under section 526 of the 
                        Federal Food, Drug, and Cosmetics Act, and 
                        approved under section 505 of such Act or 
                        licensed under subsection (a) or (k) of section 
                        351 of the Public Health Service Act to treat a 
                        serious or life-threatening disease or 
                        condition;
                            ``(ii) if administered in accordance with 
                        the labeling of such drug, is expected to 
                        result in either--
                                    ``(I) the cure of such disease or 
                                condition; or
                                    ``(II) a reduction in the symptoms 
                                of such disease or condition to the 
                                extent that such disease or condition 
                                is not expected to lead to early 
                                mortality; and
                            ``(iii) is expected to achieve a result 
                        described in clause (ii), which may be achieved 
                        over an extended period of time, after not more 
                        than 3 administrations.
                    ``(D) Relevant clinical parameter.--The term 
                `relevant clinical parameter' means, with respect to a 
                covered outpatient drug that is the subject of a risk-
                sharing value-based payment agreement--
                            ``(i) a clinical endpoint specified in the 
                        drug's labeling or supported by one or more of 
                        the compendia described in section 
                        1861(t)(2)(B)(ii)(I) that--
                                    ``(I) is able to be measured or 
                                evaluated on an annual basis for each 
                                year of the agreement on an independent 
                                basis by a provider or other entity; 
                                and
                                    ``(II) is required to be achieved 
                                (based on observed metrics in patient 
                                populations) under the terms of the 
                                agreement; or
                            ``(ii) a surrogate endpoint (as defined in 
                        section 507(e)(9) of the Federal Food, Drug, 
                        and Cosmetic Act), including those developed by 
                        patient-focused drug development tools, that--
                                    ``(I) is able to be measured or 
                                evaluated on an annual basis for each 
                                year of the agreement on an independent 
                                basis by a provider or other entity; 
                                and
                                    ``(II) has been qualified by the 
                                Food and Drug Administration.
                    ``(E) Risk-sharing value-based payment agreement.--
                The term `risk-sharing value-based payment agreement' 
                means an agreement between a State plan and a 
                manufacturer--
                            ``(i) for the purchase of a covered 
                        outpatient drug of the manufacturer that is a 
                        potentially curative treatment intended for 
                        one-time use;
                            ``(ii) under which payment for such drug 
                        shall be made pursuant to an installment-based 
                        payment structure that meets the requirements 
                        of paragraph (3);
                            ``(iii) which conditions payment on the 
                        achievement of at least 2 relevant clinical 
                        parameters (as defined in subparagraph (C));
                            ``(iv) which provides that--
                                    ``(I) the State plan will directly 
                                reimburse the manufacturer for the 
                                drug; or
                                    ``(II) a third party will reimburse 
                                the manufacture in a manner approved by 
                                the Secretary; and
                            ``(v) is approved by the Secretary in 
                        accordance with paragraph (2).
                    ``(F) Total installment year amount.--The term 
                `total installment year amount' means, with respect to 
                a risk-sharing value-based payment agreement for the 
                purchase of a covered outpatient drug and an 
                installment year, an amount equal to the product of--
                            ``(i) the unit price of the drug charged 
                        under the agreement; and
                            ``(ii) the number of units of such drug 
                        administered under the agreement during such 
                        installment year.''.
    (b) Conforming Amendments.--
            (1) Section 1903(i)(10)(A) of the Social Security Act (42 
        U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless 
        section 1927(a)(3) applies'' and inserting ``, section 
        1927(a)(3) applies with respect to such drugs, or such drugs 
        are the subject of a risk-sharing value-based payment agreement 
        under section 1927(l)''.
            (2) Section 1927(b) of the Social Security Act (42 U.S.C. 
        1396r-8(b)) is amended--
                    (A) in paragraph (1)(A), by inserting ``(except for 
                drugs for which payment is made by a State under a 
                risk-sharing value-based payment agreement under 
                subsection (l))'' after ``under the State plan for such 
                period''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (C)(i), by inserting 
                        ``or subsection (l)(2)(A)'' after 
                        ``subparagraph (A)''; and
                            (ii) in subparagraph (D), in the matter 
                        preceding clause (i), by inserting ``, under 
                        subsection (l)(2)(A),'' after ``under this 
                        paragraph''.

SEC. 207. APPLYING MEDICAID DRUG REBATE REQUIREMENT TO DRUGS PROVIDED 
              AS PART OF OUTPATIENT HOSPITAL SERVICES.

    (a) In General.--Section 1927(k)(3) of the Social Security Act (42 
U.S.C. 1396r-8(k)(3)) is amended to read as follows:
            ``(3) Limiting definition.--
                    ``(A) In general.--The term `covered outpatient 
                drug' does not include any drug, biological product, or 
                insulin provided as part of, or as incident to and in 
                the same setting as, any of the following (and for 
                which payment may be made under this title as part of 
                payment for the following and not as direct 
                reimbursement for the drug):
                            ``(i) Inpatient hospital services.
                            ``(ii) Hospice services.
                            ``(iii) Dental services, except that drugs 
                        for which the State plan authorizes direct 
                        reimbursement to the dispensing dentist are 
                        covered outpatient drugs.
                            ``(iv) Physicians' services.
                            ``(v) Outpatient hospital services.
                            ``(vi) Nursing facility services and 
                        services provided by an intermediate care 
                        facility for the mentally retarded.
                            ``(vii) Other laboratory and x-ray 
                        services.
                            ``(viii) Renal dialysis.
                    ``(B) Other exclusions.--Such term also does not 
                include any such drug or product for which a National 
                Drug Code number is not required by the Food and Drug 
                Administration or a drug or biological used for a 
                medical indication which is not a medically accepted 
                indication.
                    ``(C) State option.--At the option of a State, such 
                term may include any drug, biological product, or 
                insulin for which the State is the primary payer under 
                this title or a demonstration project concerning this 
                title, and that is provided on an outpatient basis as 
                part of, or as incident to and in the same setting as, 
                described in clause (iv) or (v) of subparagraph (A) and 
                for which payment is made as part of payment for such 
                services.
                    ``(D) No effect on best price.--Any drug, 
                biological product, or insulin excluded from the 
                definition of such term as a result of this paragraph 
                shall be treated as a covered outpatient drug for 
                purposes of determining the best price (as defined in 
                subsection (c)(1)(C)) for such drug, biological 
                product, or insulin.''.
    (b) Effective Date; Implementation Guidance.--
            (1) In general.--The amendment made by subsection (a) shall 
        take effect on the date that is 1 year after the date of 
        enactment of this Act.
            (2) Implementation and guidance.--Not later than 1 year 
        after the date of enactment of this Act, the Secretary of 
        Health and Human Services shall issue guidance and relevant 
        informational bulletins for States, manufacturers (as defined 
        in section 1927(k)(5) of the Social Security Act (42 U.S.C. 
        1396r-8(k)(5))), and other relevant stakeholders, including 
        health care providers, regarding implementation of the 
        amendment made by subsection (a).

                TITLE III--FOOD AND DRUG ADMINISTRATION

                       Subtitle A--Pay-for-Delay

SEC. 301. UNLAWFUL AGREEMENTS.

    (a) Agreements Prohibited.--Subject to subsections (b) and (c), it 
shall be unlawful for an NDA or BLA holder and a subsequent filer (or 
for two subsequent filers) to enter into, or carry out, an agreement 
resolving or settling a covered patent infringement claim on a final or 
interim basis if under such agreement--
            (1) a subsequent filer directly or indirectly receives from 
        such holder (or in the case of such an agreement between two 
        subsequent filers, the other subsequent filer) anything of 
        value, including a license; and
            (2) the subsequent filer agrees to limit or forego research 
        on, or development, manufacturing, marketing, or sales, for any 
        period of time, of the covered product that is the subject of 
        the application described in subparagraph (A) or (B) of 
        subsection (g)(8).
    (b) Exclusion.--It shall not be unlawful under subsection (a) if a 
party to an agreement described in such subsection demonstrates by 
clear and convincing evidence that the value described in subsection 
(a)(1) is compensation solely for other goods or services that the 
subsequent filer has promised to provide.
    (c) Limitation.--Nothing in this section shall prohibit an 
agreement resolving or settling a covered patent infringement claim in 
which the consideration granted by the NDA or BLA holder to the 
subsequent filer (or from one subsequent filer to another) as part of 
the resolution or settlement includes only one or more of the 
following:
            (1) The right to market the covered product that is the 
        subject of the application described in subparagraph (A) or (B) 
        of subsection (g)(8) in the United States before the expiration 
        of--
                    (A) any patent that is the basis of the covered 
                patent infringement claim; or
                    (B) any patent right or other statutory exclusivity 
                that would prevent the marketing of such covered 
                product.
            (2) A payment for reasonable litigation expenses not to 
        exceed $7,500,000 in the aggregate.
            (3) A covenant not to sue on any claim that such covered 
        product infringes a patent.
    (d) Enforcement by Federal Trade Commission.--
            (1) General application.--The requirements of this section 
        apply, according to their terms, to an NDA or BLA holder or 
        subsequent filer that is--
                    (A) a person, partnership, or corporation over 
                which the Commission has authority pursuant to section 
                5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 
                45(a)(2)); or
                    (B) a person, partnership, or corporation over 
                which the Commission would have authority pursuant to 
                such section but for the fact that such person, 
                partnership, or corporation is not organized to carry 
                on business for its own profit or that of its members.
            (2) Unfair or deceptive acts or practices enforcement 
        authority.--
                    (A) In general.--A violation of this section shall 
                be treated as an unfair or deceptive act or practice in 
                violation of section 5(a)(1) of the Federal Trade 
                Commission Act (15 U.S.C. 45(a)(1)).
                    (B) Powers of commission.--Except as provided in 
                subparagraph (C) and paragraphs (1)(B) and (3)--
                            (i) the Commission shall enforce this 
                        section in the same manner, by the same means, 
                        and with the same jurisdiction, powers, and 
                        duties as though all applicable terms and 
                        provisions of the Federal Trade Commission Act 
                        (15 U.S.C. 41 et seq.) were incorporated into 
                        and made a part of this section; and
                            (ii) any NDA or BLA holder or subsequent 
                        filer that violates this section shall be 
                        subject to the penalties and entitled to the 
                        privileges and immunities provided in the 
                        Federal Trade Commission Act.
                    (C) Judicial review.--In the case of a cease and 
                desist order issued by the Commission under section 5 
                of the Federal Trade Commission Act (15 U.S.C. 45) for 
                violation of this section, a party to such order may 
                obtain judicial review of such order as provided in 
                such section 5, except that--
                            (i) such review may only be obtained in--
                                    (I) the United States Court of 
                                Appeals for the District of Columbia 
                                Circuit;
                                    (II) the United States Court of 
                                Appeals for the circuit in which the 
                                ultimate parent entity, as defined in 
                                section 801.1(a)(3) of title 16, Code 
                                of Federal Regulations, or any 
                                successor thereto, of the NDA or BLA 
                                holder (if any such holder is a party 
                                to such order) is incorporated as of 
                                the date that the application described 
                                in subparagraph (A) or (B) of 
                                subsection (g)(8) or an approved 
                                application that is deemed to be a 
                                license for a biological product under 
                                section 351(k) of the Public Health 
                                Service Act (42 U.S.C. 262(k)) pursuant 
                                to section 7002(e)(4) of the Biologics 
                                Price Competition and Innovation Act of 
                                2009 (Public Law 111-148; 124 Stat. 
                                817) is submitted to the Commissioner 
                                of Food and Drugs; or
                                    (III) the United States Court of 
                                Appeals for the circuit in which the 
                                ultimate parent entity, as so defined, 
                                of any subsequent filer that is a party 
                                to such order is incorporated as of the 
                                date that the application described in 
                                subparagraph (A) or (B) of subsection 
                                (g)(8) is submitted to the Commissioner 
                                of Food and Drugs; and
                            (ii) the petition for review shall be filed 
                        in the court not later than 30 days after such 
                        order is served on the party seeking review.
            (3) Additional enforcement authority.--
                    (A) Civil penalty.--The Commission may commence a 
                civil action to recover a civil penalty in a district 
                court of the United States against any NDA or BLA 
                holder or subsequent filer that violates this section.
                    (B) Special rule for recovery of penalty if cease 
                and desist order issued.--
                            (i) In general.--If the Commission has 
                        issued a cease and desist order in a proceeding 
                        under section 5 of the Federal Trade Commission 
                        Act (15 U.S.C. 45) for violation of this 
                        section--
                                    (I) the Commission may commence a 
                                civil action under subparagraph (A) to 
                                recover a civil penalty against any 
                                party to such order at any time before 
                                the expiration of the 1-year period 
                                beginning on the date on which such 
                                order becomes final under section 5(g) 
                                of such Act (15 U.S.C. 45(g)); and
                                    (II) in such civil action, the 
                                findings of the Commission as to the 
                                material facts in such proceeding shall 
                                be conclusive, unless--
                                            (aa) the terms of such 
                                        order expressly provide that 
                                        the Commission's findings shall 
                                        not be conclusive; or
                                            (bb) such order became 
                                        final by reason of section 
                                        5(g)(1) of such Act (15 U.S.C. 
                                        45(g)(1)), in which case such 
                                        findings shall be conclusive if 
                                        supported by evidence.
                            (ii) Relationship to penalty for violation 
                        of an order.--The penalty provided in clause 
                        (i) for violation of this section is separate 
                        from and in addition to any penalty that may be 
                        incurred for violation of an order of the 
                        Commission under section 5(l) of the Federal 
                        Trade Commission Act (15 U.S.C. 45(l)).
                    (C) Amount of penalty.--
                            (i) In general.--The amount of a civil 
                        penalty imposed in a civil action under 
                        subparagraph (A) on a party to an agreement 
                        described in subsection (a) shall be sufficient 
                        to deter violations of this section, but in no 
                        event greater than--
                                    (I) if such party is the NDA or BLA 
                                holder (or, in the case of an agreement 
                                between two subsequent filers, the 
                                subsequent filer who gave the value 
                                described in subsection (a)(1)), the 
                                greater of--
                                            (aa) 3 times the value 
                                        received by such NDA or BLA 
                                        holder (or by such subsequent 
                                        filer) that is reasonably 
                                        attributable to the violation 
                                        of this section; or
                                            (bb) 3 times the value 
                                        given to the subsequent filer 
                                        (or to the other subsequent 
                                        filer) reasonably attributable 
                                        to the violation of this 
                                        section; and
                                    (II) if such party is the 
                                subsequent filer (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who 
                                received the value described in 
                                subsection (a)(1)), 3 times the value 
                                received by such subsequent filer that 
                                is reasonably attributable to the 
                                violation of this section.
                            (ii) Factors for consideration.--In 
                        determining such amount, the court shall take 
                        into account--
                                    (I) the nature, circumstances, 
                                extent, and gravity of the violation;
                                    (II) with respect to the violator, 
                                the degree of culpability, any history 
                                of violations, the ability to pay, any 
                                effect on the ability to continue doing 
                                business, profits earned by the NDA or 
                                BLA holder (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who gave 
                                the value described in subsection 
                                (a)(1)), compensation received by the 
                                subsequent filer (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who 
                                received the value described in 
                                subsection (a)(1)), and the amount of 
                                commerce affected; and
                                    (III) other matters that justice 
                                requires.
                    (D) Injunctions and other equitable relief.--In a 
                civil action under subparagraph (A), the United States 
                district courts are empowered to grant mandatory 
                injunctions and such other and further equitable relief 
                as they deem appropriate.
            (4) Remedies in addition.--Remedies provided in this 
        subsection are in addition to, and not in lieu of, any other 
        remedy provided by Federal law.
            (5) Preservation of authority of commission.--Nothing in 
        this section shall be construed to affect any authority of the 
        Commission under any other provision of law.
    (e) Federal Trade Commission Rulemaking.--The Commission may, in 
its discretion, by rule promulgated under section 553 of title 5, 
United States Code, exempt from this section certain agreements 
described in subsection (a) if the Commission finds such agreements to 
be in furtherance of market competition and for the benefit of 
consumers.
    (f) Antitrust Laws.--Nothing in this section shall modify, impair, 
limit, or supersede the applicability of the antitrust laws as defined 
in subsection (a) of the first section of the Clayton Act (15 U.S.C. 
12(a)), and of section 5 of the Federal Trade Commission Act (15 U.S.C. 
45) to the extent that such section 5 applies to unfair methods of 
competition. Nothing in this section shall modify, impair, limit, or 
supersede the right of a subsequent filer to assert claims or 
counterclaims against any person, under the antitrust laws or other 
laws relating to unfair competition.
    (g) Definitions.--In this section:
            (1) Agreement resolving or settling a covered patent 
        infringement claim.--The term ``agreement resolving or settling 
        a covered patent infringement claim'' means any agreement 
        that--
                    (A) resolves or settles a covered patent 
                infringement claim; or
                    (B) is contingent upon, provides for a contingent 
                condition for, or is otherwise related to the 
                resolution or settlement of a covered patent 
                infringement claim.
            (2) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (3) Covered patent infringement claim.--The term ``covered 
        patent infringement claim'' means an allegation made by the NDA 
        or BLA holder to a subsequent filer (or, in the case of an 
        agreement between two subsequent filers, by one subsequent 
        filer to another), whether or not included in a complaint filed 
        with a court of law, that--
                    (A) the submission of the application described in 
                subparagraph (A) or (B) of paragraph (9), or the 
                manufacture, use, offering for sale, sale, or 
                importation into the United States of a covered product 
                that is the subject of such an application--
                            (i) in the case of an agreement between an 
                        NDA or BLA holder and a subsequent filer, 
                        infringes any patent owned by, or exclusively 
                        licensed to, the NDA or BLA holder of the 
                        covered product; or
                            (ii) in the case of an agreement between 
                        two subsequent filers, infringes any patent 
                        owned by the subsequent filer; or
                    (B) in the case of an agreement between an NDA or 
                BLA holder and a subsequent filer, the covered product 
                to be manufactured under such application uses a 
                covered product as claimed in a published patent 
                application.
            (4) Covered product.--The term ``covered product'' means a 
        drug (as defined in section 201(g) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(g))), including a biological 
        product (as defined in section 351(i) of the Public Health 
        Service Act (42 U.S.C. 262(i))).
            (5) NDA or bla holder.--The term ``NDA or BLA holder'' 
        means--
                    (A) the holder of--
                            (i) an approved new drug application filed 
                        under section 505(b)(1) of the Federal Food, 
                        Drug, and Cosmetic Act (21 U.S.C. 355(b)(1)) 
                        for a covered product; or
                            (ii) a biologics license application filed 
                        under section 351(a) of the Public Health 
                        Service Act (42 U.S.C. 262(a)) with respect to 
                        a biological product;
                    (B) a person owning or controlling enforcement of 
                the patent on--
                            (i) the list published under section 
                        505(j)(7) of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 355(j)(7)) in 
                        connection with the application described in 
                        subparagraph (A)(i); or
                            (ii) any list published under section 351 
                        of the Public Health Service Act (42 U.S.C. 
                        262) comprised of patents associated with 
                        biologics license applications filed under 
                        section 351(a) of such Act (42 U.S.C. 262(a)); 
                        or
                    (C) the predecessors, subsidiaries, divisions, 
                groups, and affiliates controlled by, controlling, or 
                under common control with any entity described in 
                subparagraph (A) or (B) (such control to be presumed by 
                direct or indirect share ownership of 50 percent or 
                greater), as well as the licensees, licensors, 
                successors, and assigns of each of the entities.
            (6) Patent.--The term ``patent'' means a patent issued by 
        the United States Patent and Trademark Office.
            (7) Statutory exclusivity.--The term ``statutory 
        exclusivity'' means those prohibitions on the submission or 
        approval of drug applications under clauses (ii) through (iv) 
        of section 505(c)(3)(E) (5- and 3-year exclusivity), clauses 
        (ii) through (iv) of section 505(j)(5)(F) (5-year and 3-year 
        exclusivity), section 505(j)(5)(B)(iv) (180-day exclusivity), 
        section 527 (orphan drug exclusivity), section 505A (pediatric 
        exclusivity), or section 505E (qualified infectious disease 
        product exclusivity) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 355(c)(3)(E), 355(j)(5)(B)(iv), 355(j)(5)(F), 
        360cc, 355a, 355f), or prohibitions on the submission or 
        licensing of biologics license applications under section 
        351(k)(6) (interchangeable biological product exclusivity) or 
        section 351(k)(7) (biological product reference product 
        exclusivity) of the Public Health Service Act (42 U.S.C. 
        262(k)(6), (7)).
            (8) Subsequent filer.--The term ``subsequent filer'' 
        means--
                    (A) in the case of a drug, a party that owns or 
                controls an abbreviated new drug application submitted 
                pursuant to section 505(j) of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 355(j)) or a new drug 
                application submitted pursuant to section 505(b)(2) of 
                the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                355(b)(2)) and filed under section 505(b)(1) of such 
                Act (21 U.S.C. 355(b)(1)) or has the exclusive rights 
                to distribute the covered product that is the subject 
                of such application; or
                    (B) in the case of a biological product, a party 
                that owns or controls an application filed with the 
                Food and Drug Administration under section 351(k) of 
                the Public Health Service Act (42 U.S.C. 262(k)) or has 
                the exclusive rights to distribute the biological 
                product that is the subject of such application.
    (h) Effective Date.--This section applies with respect to 
agreements described in subsection (a) entered into on or after the 
date of the enactment of this Act.

SEC. 302. NOTICE AND CERTIFICATION OF AGREEMENTS.

    (a) Notice of All Agreements.--Section 1111(7) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (21 
U.S.C. 355 note) is amended by inserting ``or the owner of a patent for 
which a claim of infringement could reasonably be asserted against any 
person for making, using, offering to sell, selling, or importing into 
the United States a biological product that is the subject of a 
biosimilar biological product application'' before the period at the 
end.
    (b) Certification of Agreements.--Section 1112 of such Act (21 
U.S.C. 355 note) is amended by adding at the end the following:
    ``(d) Certification.--The Chief Executive Officer or the company 
official responsible for negotiating any agreement under subsection (a) 
or (b) that is required to be filed under subsection (c) shall, within 
30 days of such filing, execute and file with the Assistant Attorney 
General and the Commission a certification as follows:`I declare that 
the following is true, correct, and complete to the best of my 
knowledge: The materials filed with the Federal Trade Commission and 
the Department of Justice under section 1112 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003, with 
respect to the agreement referenced in this certification--' `
            ```(1) represent the complete, final, and exclusive 
        agreement between the parties;
            ```(2) include any ancillary agreements that are contingent 
        upon, provide a contingent condition for, were entered into 
        within 30 days of, or are otherwise related to, the referenced 
        agreement; and
            ```(3) include written descriptions of any oral agreements, 
        representations, commitments, or promises between the parties 
        that are responsive to subsection (a) or (b) of such section 
        1112 and have not been reduced to writing.'''.

SEC. 303. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.

    Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting ``section 
301 of the Lower Costs, More Cures Act of 2021 or'' after ``that the 
agreement has violated''.

SEC. 304. COMMISSION LITIGATION AUTHORITY.

    Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C. 
56(a)(2)) is amended--
            (1) in subparagraph (D), by striking ``or'' after the 
        semicolon;
            (2) in subparagraph (E), by moving the margin 2 ems to the 
        left and inserting ``or'' after the semicolon; and
            (3) by inserting after subparagraph (E) the following:
            ``(F) under section 301(d)(3)(A) of the Lower Costs, More 
        Cures Act of 2021;''.

SEC. 305. STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in subsection (b), the 
Commission shall commence any administrative proceeding or civil action 
to enforce section 301 of this Act not later than 6 years after the 
date on which the parties to the agreement file the Notice of Agreement 
as provided by section 1112(c)(2) and (d) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (21 U.S.C. 355 note).
    (b) Civil Action After Issuance of Cease and Desist Order.--If the 
Commission has issued a cease and desist order under section 5 of the 
Federal Trade Commission Act (15 U.S.C. 45) for violation of section 
301 of this Act and the proceeding for the issuance of such order was 
commenced within the period required by subsection (a) of this section, 
such subsection does not prohibit the commencement, after such period, 
of a civil action under section 301(d)(3)(A) against a party to such 
order or a civil action under subsection (l) of such section 5 for 
violation of such order.

             Subtitle B--Advancing Education on Biosimilars

SEC. 321. EDUCATION ON BIOLOGICAL PRODUCTS.

    (a) Website; Continuing Education.--Subpart 1 of part F of title 
III of the Public Health Service Act (42 U.S.C. 262 et seq.) is amended 
by adding at the end the following:

``SEC. 352A. EDUCATION ON BIOLOGICAL PRODUCTS.

    ``(a) Internet Website.--
            ``(1) In general.--The Secretary shall maintain and operate 
        an internet website to provide educational materials for health 
        care providers, patients, and caregivers, regarding the meaning 
        of the terms, and the standards for review and licensing of, 
        biological products, including biosimilar biological products 
        and interchangeable biosimilar biological products.
            ``(2) Content.--Educational materials provided under 
        paragraph (1) may include--
                    ``(A) explanations of key statutory and regulatory 
                terms, including `biosimilar' and `interchangeable', 
                and clarification regarding the use of interchangeable 
                biosimilar biological products;
                    ``(B) information related to development programs 
                for biological products, including biosimilar 
                biological products and interchangeable biosimilar 
                biological products and relevant clinical 
                considerations for prescribers, which may include, as 
                appropriate and applicable, information related to the 
                comparability of such biological products;
                    ``(C) an explanation of the process for reporting 
                adverse events for biological products, including 
                biosimilar biological products and interchangeable 
                biosimilar biological products; and
                    ``(D) an explanation of the relationship between 
                biosimilar biological products and interchangeable 
                biosimilar biological products licensed under section 
                351(k) and reference products (as defined in section 
                351(i)), including the standards for review and 
                licensing of each such type of biological product.
            ``(3) Format.--The educational materials provided under 
        paragraph (1) may be--
                    ``(A) in formats such as webinars, continuing 
                medical education modules, videos, fact sheets, 
                infographics, stakeholder toolkits, or other formats as 
                appropriate and applicable; and
                    ``(B) tailored for the unique needs of health care 
                providers, patients, caregivers, and other audiences, 
                as the Secretary determines appropriate.
            ``(4) Other information.--In addition to the information 
        described in paragraph (2), the Secretary shall continue to 
        publish the following information:
                    ``(A) The action package of each biological product 
                licensed under subsection (a) or (k).
                    ``(B) The summary review of each biological product 
                licensed under subsection (a) or (k).
            ``(5) Confidential and trade secret information.--This 
        subsection does not authorize the disclosure of any trade 
        secret, confidential commercial or financial information, or 
        other matter described in section 552(b) of title 5.
    ``(b) Continuing Education.--The Secretary shall advance education 
and awareness among health care providers regarding biological 
products, including biosimilar biological products and interchangeable 
biosimilar biological products, as appropriate, including by developing 
or improving continuing education programs that advance the education 
of such providers on the prescribing of, and relevant clinical 
considerations with respect to, biological products, including 
biosimilar biological products and interchangeable biosimilar 
biological products.''.
    (b) Application Under the Medicare Merit-Based Incentive Payment 
System.--Section 1848(q)(5)(C) of the Social Security Act (42 U.S.C. 
1395w-4(q)(5)(C)) is amended by adding at the end the following new 
clause:
                            ``(iv) Clinical medical education program 
                        on biosimilar biological products.--Completion 
                        of a clinical medical education program 
                        developed or improved under section 352A(b) of 
                        the Public Health Service Act by a MIPS 
                        eligible professional during a performance 
                        period shall earn such eligible professional 
                        one-half of the highest potential score for the 
                        performance category described in paragraph 
                        (2)(A)(iii) for such performance period. A MIPS 
                        eligible professional may only count the 
                        completion of such a program for purposes of 
                        such category one time during the eligible 
                        professional's lifetime.''.

                      Subtitle C--Other Provisions

SEC. 331. CLARIFYING THE MEANING OF NEW CHEMICAL ENTITY.

    Chapter V of the Federal Food, Drug, and Cosmetic Act is amended--
            (1) in section 505 (21 U.S.C. 355)--
                    (A) in subsection (c)(3)(E)--
                            (i) in clause (ii), by striking ``active 
                        ingredient (including any ester or salt of the 
                        active ingredient)'' and inserting ``active 
                        moiety (as defined by the Secretary in section 
                        314.3 of title 21, Code of Federal Regulations 
                        (or any successor regulations))''; and
                            (ii) in clause (iii), by striking ``active 
                        ingredient (including any ester or salt of the 
                        active ingredient)'' and inserting ``active 
                        moiety (as defined by the Secretary in section 
                        314.3 of title 21, Code of Federal Regulations 
                        (or any successor regulations))'';
                    (B) in subsection (j)(5)(F)--
                            (i) in clause (ii), by striking ``active 
                        ingredient (including any ester or salt of the 
                        active ingredient)'' and inserting ``active 
                        moiety (as defined by the Secretary in section 
                        314.3 of title 21, Code of Federal Regulations 
                        (or any successor regulations))''; and
                            (ii) in clause (iii), by striking ``active 
                        ingredient (including any ester or salt of the 
                        active ingredient)'' and inserting ``active 
                        moiety (as defined by the Secretary in section 
                        314.3 of title 21, Code of Federal Regulations 
                        (or any successor regulations))'';
                    (C) in subsection (l)(2)(A)(i), by striking 
                ``active ingredient (including any ester or salt of the 
                active ingredient)'' and inserting ``active moiety (as 
                defined by the Secretary in section 314.3 of title 21, 
                Code of Federal Regulations (or any successor 
                regulations))'';
                    (D) in subsection (s), in the matter preceding 
                paragraph (1), by striking ``active ingredient 
                (including any ester or salt of the active 
                ingredient)'' and inserting ``active moiety (as defined 
                by the Secretary in section 314.3 of title 21, Code of 
                Federal Regulations (or any successor regulations))''; 
                and
                    (E) in subsection (u)(1), in the matter preceding 
                subparagraph (A)--
                            (i) by striking ``active ingredient 
                        (including any ester or salt of the active 
                        ingredient)'' and inserting ``active moiety (as 
                        defined by the Secretary in section 314.3 of 
                        title 21, Code of Federal Regulations (or any 
                        successor regulations))''; and
                            (ii) by striking ``same active ingredient'' 
                        and inserting ``same active moiety'';
            (2) in section 512(c)(2)(F) (21 U.S.C. 360b(c)(2)(F))--
                    (A) in clause (i), by striking ``active ingredient 
                (including any ester or salt of the active 
                ingredient)'' and inserting ``active moiety (as defined 
                by the Secretary in section 314.3 of title 21, Code of 
                Federal Regulations (or any successor regulations))'';
                    (B) in clause (ii), by striking ``active ingredient 
                (including any ester or salt of the active 
                ingredient)'' and inserting ``active moiety (as defined 
                by the Secretary in section 314.3 of title 21, Code of 
                Federal Regulations (or any successor regulations))''; 
                and
                    (C) in clause (v), by striking ``active ingredient 
                (including any ester or salt of the active 
                ingredient)'' and inserting ``active moiety (as defined 
                by the Secretary in section 314.3 of title 21, Code of 
                Federal Regulations (or any successor regulations))'';
            (3) in section 524(a)(4)(C) (21 U.S.C. 360n(a)(4)(C)), by 
        striking ``active ingredient (including any ester or salt of 
        the active ingredient)'' and inserting ``active moiety (as 
        defined by the Secretary in section 314.3 of title 21, Code of 
        Federal Regulations (or any successor regulations))'';
            (4) in section 529(a)(4)(A)(ii) (21 U.S.C. 
        360ff(a)(4)(A)(ii)), by striking ``active ingredient (including 
        any ester or salt of the active ingredient)'' and inserting 
        ``active moiety (as defined by the Secretary in section 314.3 
        of title 21, Code of Federal Regulations (or any successor 
        regulations))''; and
            (5) in section 565A(a)(4)(D) (21 U.S.C. 360bbb-
        4a(a)(4)(D)), by striking ``active ingredient (including any 
        ester or salt of the active ingredient)'' and inserting 
        ``active moiety (as defined by the Secretary in section 314.3 
        of title 21, Code of Federal Regulations (or any successor 
        regulations))''.

                      TITLE IV--REVENUE PROVISION

SEC. 401. SAFE HARBOR FOR HIGH DEDUCTIBLE HEALTH PLANS WITHOUT 
              DEDUCTIBLE FOR INSULIN.

    (a) In General.--Section 223(c)(2)(C) of the Internal Revenue Code 
of 1986 is amended by inserting ``or for insulin or any device for the 
delivery of insulin'' before the period at the end.
    (b) Effective Date.--The amendment made by this section shall apply 
to months beginning after the date of the enactment of this Act.

                         TITLE V--MISCELLANEOUS

SEC. 501. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL 
              PERIOD.

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

SEC. 502. GAO STUDY AND REPORT ON AVERAGE SALES PRICE.

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

SEC. 503. REQUIRING PRESCRIPTION DRUG PLANS AND MA-PD PLANS TO REPORT 
              POTENTIAL FRAUD, WASTE, AND ABUSE TO THE SECRETARY OF 
              HHS.

    Section 1860D-4 of the Social Security Act (42 U.S.C. 1395w-104) is 
amended by adding at the end the following new subsection:
    ``(p) Reporting Potential Fraud, Waste, and Abuse.--Beginning 
January 1, 2022, the PDP sponsor of a prescription drug plan shall 
report to the Secretary, as specified by the Secretary--
            ``(1) any substantiated or suspicious activities (as 
        defined by the Secretary) with respect to the program under 
        this part as it relates to fraud, waste, and abuse; and
            ``(2) any steps made by the PDP sponsor after identifying 
        such activities to take corrective actions.''.

SEC. 504. ESTABLISHMENT OF PHARMACY QUALITY MEASURES UNDER MEDICARE 
              PART D.

    Section 1860D-4(c) of the Social Security Act (42 U.S.C. 1395w-
104(c)) is amended by adding at the end the following new paragraph:
            ``(8) Application of pharmacy quality measures.--
                    ``(A) In general.--A PDP sponsor that implements 
                incentive payments to a pharmacy or price concessions 
                paid by a pharmacy based on quality measures shall use 
                measures established or approved by the Secretary under 
                subparagraph (B) with respect to payment for covered 
                part D drugs dispensed by such pharmacy.
                    ``(B) Standard pharmacy quality measures.--The 
                Secretary shall establish or approve standard quality 
                measures from a consensus and evidence-based 
                organization for payments described in subparagraph 
                (A). Such measures shall focus on patient health 
                outcomes and be based on proven criteria measuring 
                pharmacy performance.
                    ``(C) Effective date.--The requirement under 
                subparagraph (A) shall take effect for plan years 
                beginning on or after January 1, 2023, or such earlier 
                date specified by the Secretary if the Secretary 
                determines there are sufficient measures established or 
                approved under subparagraph (B) to meet the requirement 
                under subparagraph (A).''.

SEC. 505. IMPROVING COORDINATION BETWEEN THE FOOD AND DRUG 
              ADMINISTRATION AND THE CENTERS FOR MEDICARE & MEDICAID 
              SERVICES.

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

SEC. 506. PATIENT CONSULTATION IN MEDICARE NATIONAL AND LOCAL COVERAGE 
              DETERMINATIONS IN ORDER TO MITIGATE BARRIERS TO INCLUSION 
              OF SUCH PERSPECTIVES.

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

SEC. 507. MEDPAC REPORT ON SHIFTING COVERAGE OF CERTAIN MEDICARE PART B 
              DRUGS TO MEDICARE PART D.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study on 
shifting coverage of certain drugs and biologicals for which payment is 
currently made under part B of title XVIII of the Social Security Act 
(42 U.S.C. 1395j et seq.) to part D of such title (42 U.S.C. 1395w-21 
et seq.). Such study shall include an analysis of--
            (1) differences in program structures and payment methods 
        for drugs and biologicals covered under such parts B and D, 
        including effects of such a shift on program spending, 
        beneficiary cost-sharing liability, and utilization management 
        techniques for such drugs and biologicals; and
            (2) the feasibility and policy implications of shifting 
        coverage of drugs and biologicals for which payment is 
        currently made under such part B to such part D.
    (b) Report.--
            (1) In general.--Not later than June 30, 2023, the 
        Commission shall submit to Congress a report containing the 
        results of the study conducted under subsection (a).
            (2) Contents.--The report under paragraph (1) shall include 
        information, and recommendations as the Commission deems 
        appropriate, regarding--
                    (A) formulary design under such part D;
                    (B) the ability of the benefit structure under such 
                part D to control total spending on drugs and 
                biologicals for which payment is currently made under 
                such part B;
                    (C) changes to the bid process under such part D, 
                if any, that may be necessary to integrate coverage of 
                such drugs and biologicals into such part D;
                    (D) any other changes to the program that Congress 
                should consider in determining whether to shift 
                coverage of such drugs and biologicals from such part B 
                to such part D; and
                    (E) the feasibility and policy implications of 
                creating a methodology to preserve the healthcare 
                provider's ability to take title of the drug, including 
                a methodology under which--
                            (i) prescription drug plans negotiate 
                        reimbursement rates and other arrangements with 
                        drug manufacturers on behalf of a wholesaler;
                            (ii) wholesalers purchase the drugs from 
                        the manufacturers at the negotiated rate and 
                        ship them through distributors to physicians to 
                        administer to patients;
                            (iii) physicians and hospitals purchase the 
                        drug from the wholesaler via the distributor;
                            (iv) after administering the drug, the 
                        physician submits a claim to the MAC for their 
                        drug administration fee;
                            (v) to be reimbursed for the purchase of 
                        the drug from the distributor, the physician 
                        furnishes the claim for the drug itself to the 
                        wholesaler and the wholesaler would refund the 
                        cost of the drug to the physician; and
                            (vi) the wholesaler passes this claim to 
                        the PDP to receive reimbursement.

SEC. 508. REQUIREMENT THAT DIRECT-TO-CONSUMER ADVERTISEMENTS FOR 
              PRESCRIPTION DRUGS AND BIOLOGICAL PRODUCTS INCLUDE 
              TRUTHFUL AND NON-MISLEADING PRICING INFORMATION.

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

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

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

SEC. 509. CHIEF PHARMACEUTICAL NEGOTIATOR AT THE OFFICE OF THE UNITED 
              STATES TRADE REPRESENTATIVE.

    (a) In General.--Section 141 of the Trade Act of 1974 (19 U.S.C. 
2171) is amended--
            (1) in subsection (b)(2)--
                    (A) by striking ``and one Chief Innovation and 
                Intellectual Property Negotiator'' and inserting ``one 
                Chief Innovation and Intellectual Property Negotiator, 
                and one Chief Pharmaceutical Negotiator'';
                    (B) by striking ``or the Chief Innovation and 
                Intellectual Property Negotiator'' and inserting ``the 
                Chief Innovation and Intellectual Property Negotiator, 
                or the Chief Pharmaceutical Negotiator''; and
                    (C) by striking ``and the Chief Innovation and 
                Intellectual Property Negotiator'' and inserting ``the 
                Chief Innovation and Intellectual Property Negotiator, 
                and the Chief Pharmaceutical Negotiator''; and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
            ``(7) The principal function of the Chief Pharmaceutical 
        Negotiator shall be to conduct trade negotiations and to 
        enforce trade agreements relating to United States 
        pharmaceutical products and services. The Chief Pharmaceutical 
        Negotiator shall be a vigorous advocate on behalf of United 
        States pharmaceutical interests. The Chief Pharmaceutical 
        Negotiator shall perform such other functions as the United 
        States Trade Representative may direct.''.
    (b) Compensation.--Section 5314 of title 5, United States Code, is 
amended by striking ``Chief Innovation and Intellectual Property 
Negotiator, Office of the United States Trade Representative.'' and 
inserting the following:
            ``Chief Innovation and Intellectual Property Negotiator, 
        Office of the United States Trade Representative.
            ``Chief Pharmaceutical Negotiator, Office of the United 
        States Trade Representative.''.
    (c) Report Required.--Not later than the date that is one year 
after the appointment of the first Chief Pharmaceutical Negotiator 
pursuant to paragraph (2) of section 141(b) of the Trade Act of 1974, 
as amended by subsection (a), and annually thereafter, the United 
States Trade Representative shall submit to the Committee on Finance of 
the Senate and the Committee on Ways and Means of the House of 
Representatives a report describing in detail--
            (1) enforcement actions taken by the United States Trade 
        Representative during the one-year period preceding the 
        submission of the report to ensure the protection of United 
        States pharmaceutical products and services; and
            (2) other actions taken by the United States Trade 
        Representative to advance United States pharmaceutical products 
        and services.
                                 <all>
Lower Costs, More Cures Act of 2021
To provide for certain reforms with respect to the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, the Food and Drug Administration, and for other purposes.
Lower Costs, More Cures Act of 2021
Rep. McMorris Rodgers, Cathy