Not later than the selected drug publication date with respect to an initial price applicability year, in accordance with subsection (b), the Secretary shall select and publish a list of-
Subject to subsection (c)(2) and section 1320f-3(f)(5) of this title, each drug published on the list pursuant to the previous sentence and subsection (b)(3) shall be subject to the negotiation process under section 1320f-3 of this title for the negotiation period with respect to such initial price applicability year (and the renegotiation process under such section as applicable for any subsequent year during the applicable price applicability period).
In carrying out subsection (a), subject to paragraph (2), the Secretary shall, with respect to an initial price applicability year, do the following:
With respect to the initial price applicability year 2026 and with respect to the initial price applicability year 2027, the Secretary shall apply paragraph (1) as if the reference to "negotiation-eligible drugs described in subsection (d)(1)" were a reference to "negotiation-eligible drugs described in subsection (d)(1)(A)" and as if the reference to "total expenditures for such drugs under parts B and D of subchapter XVIII" were a reference to "total expenditures for such drugs under part D of subchapter XVIII".
Pursuant to subparagraphs (B)(ii)(I) and (C)(i) of subsection (f)(2), the Secretary shall select and include on the list published under subsection (a) the biological products described in such subparagraphs. Such biological products shall count towards the required number of drugs to be selected under subsection (a)(1).
For purposes of this part, in accordance with subsection (e)(2) and subject to paragraph (2), each negotiation-eligible drug included on the list published under subsection (a) with respect to an initial price applicability year shall be referred to as a "selected drug" with respect to such year and each subsequent year beginning before the first year that begins at least 9 months after the date on which the Secretary determines at least one drug or biological product-
A negotiation-eligible drug-
shall not be subject to the negotiation process under section 1320f-3 of this title with respect to such negotiation period and shall continue to be considered a selected drug under this part with respect to the number of negotiation-eligible drugs published on the list under subsection (a) with respect to such initial price applicability year.
For purposes of this part, subject to paragraph (2), the term "negotiation-eligible drug" means, with respect to the selected drug publication date with respect to an initial price applicability year, a qualifying single source drug, as defined in subsection (e), that is described in either of the following subparagraphs (or, with respect to the initial price applicability year 2026 or 2027, that is described in subparagraph (A)):
The qualifying single source drug is, determined in accordance with subsection (e)(2), among the 50 qualifying single source drugs with the highest total expenditures under part D of subchapter XVIII, as determined by the Secretary in accordance with paragraph (3), during the most recent 12-month period for which data are available prior to such selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date).
The qualifying single source drug is, determined in accordance with subsection (e)(2), among the 50 qualifying single source drugs with the highest total expenditures under part B of subchapter XVIII, as determined by the Secretary in accordance with paragraph (3), during such most recent 12-month period, as described in subparagraph (A).
Subject to subparagraph (C), the term "negotiation-eligible drug" shall not include, with respect to the initial price applicability years 2026, 2027, and 2028, a qualifying single source drug that meets either of the following:
The total expenditures for the qualifying single source drug under part D of subchapter XVIII, as determined by the Secretary in accordance with paragraph (3)(B), during 2021-
The total expenditures for the qualifying single source drug under part B of subchapter XVIII, as determined by the Secretary in accordance with paragraph (3)(B), during 2021-
All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as one manufacturer for purposes of this paragraph.
A drug shall not be considered to be a qualifying single source drug described in clause (i) or (ii) of subparagraph (A) if the manufacturer of such drug is acquired after 2021 by another manufacturer that does not meet the definition of a specified manufacturer under section 1395w-114c(g)(4)(B)(ii) of this title, effective at the beginning of the plan year immediately following such acquisition or, in the case of an acquisition before 2025, effective January 1, 2025.
A new formulation, such as an extended release formulation, of a qualifying single source drug shall not be considered a qualifying single source drug described in subparagraph (A).
In applying subparagraphs (A) and (B) of paragraph (1), the Secretary shall not consider or count-
In determining whether a qualifying single source drug satisfies any of the criteria described in paragraph (1) or (2), the Secretary shall use data that is aggregated across dosage forms and strengths of the drug, including new formulations of the drug, such as an extended release formulation, and not based on the specific formulation or package size or package type of the drug.
For purposes of this part, the term "qualifying single source drug" means, with respect to an initial price applicability year, subject to paragraphs (2) and (3), a covered part D drug (as defined in section 1395w-102(e) of this title) that is described in any of the following or a drug or biological product for which payment may be made under part B of subchapter XVIII that is described in any of the following:
A drug-
A biological product-
In the case of a qualifying single source drug described in subparagraph (A) or (B) of paragraph (1) that is the listed drug (as such term is used in section 355(j) of title 21) or a product described in clause (ii) of subparagraph (B), with respect to an authorized generic drug, in applying the provisions of this part, such authorized generic drug and such listed drug or such product shall be treated as the same qualifying single source drug.
For purposes of this paragraph, the term "authorized generic drug" means-
In this part, the term "qualifying single source drug" does not include any of the following:
A drug that is designated as a drug for only one rare disease or condition under section 360bb of title 21 and for which the only approved indication (or indications) is for such disease or condition.
A drug or biological product with respect to which the total expenditures under parts B and D of subchapter XVIII, as determined by the Secretary in accordance with subsection (d)(3)(B)-
A biological product that is derived from human whole blood or plasma.
Subject to subparagraph (B), in the case of a biological product that would (but for this subsection) be an extended-monopoly drug (as defined in section 1320f-3(c)(4) of this title) included as a selected drug on the list published under subsection (a) with respect to an initial price applicability year, the rules described in paragraph (2) shall apply if the Secretary determines that there is a high likelihood (as described in paragraph (3)) that a biosimilar biological product (for which such biological product will be the reference product) will be licensed and marketed under section 262(k) of this title before the date that is 2 years after the selected drug publication date with respect to such initial price applicability year.
The Secretary shall not provide for a delay under-
A request made under clause (i) shall be submitted to the Secretary by such manufacturer at a time and in a form and manner specified by the Secretary, and contain-
After the Secretary has reviewed the request and materials submitted under subclause (I), the manufacturer shall submit any additional information and documents requested by the Secretary necessary to make determinations under this subsection.
The items described in this clause are the following:
All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or in a partnership, shall be treated as one manufacturer for purposes of paragraph (2)(D)(iv).
In clause (i), the term "partnership" means a syndicate, group, pool, joint venture, or other organization through or by means of which any business, financial operation, or venture is carried on by the manufacturer of the biological product and the manufacturer of the biosimilar biological product.
The rules described in this paragraph are the following:
If a determination of high likelihood is made under paragraph (3), the Secretary shall delay the inclusion of the biological product as a selected drug on the list published under subsection (a) until such list is published with respect to the initial price applicability year that is 1 year after the initial price applicability year for which the biological product would have been included as a selected drug on such list.
If, during the time period between the selected drug publication date on which the biological product would have been included on the list as a selected drug pursuant to subsection (a) but for subparagraph (A) and the selected drug publication date with respect to the initial price applicability year that is 1 year after the initial price applicability year for which such biological product would have been included as a selected drug on such list, the Secretary determines that the biosimilar biological product for which the manufacturer submitted the request under paragraph (1)(B)(i)(II) (and for which the Secretary previously made a high likelihood determination under paragraph (3)) has not been licensed and marketed under section 262(k) of this title, the Secretary shall, at the request of such manufacturer-
If the Secretary determines that there is not a high likelihood that such biosimilar biological product will be licensed and marketed as described in clause (i)(I) or there has not been a significant amount of progress as described in clause (i)(II)-
If the Secretary determines that there is a high likelihood that such biosimilar biological product will be licensed and marketed (as described in clause (i)(I)) and a significant amount of progress has been made by the manufacturer of such biosimilar biological product towards such licensure and marketing (as described in clause (i)(II)), the Secretary shall delay the inclusion of the biological product as a selected drug on the list published under subsection (a) until the selected drug publication date of such list with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected drug on such list but for this subsection.
If, during the time period between the selected drug publication date of the list for which the biological product would have been included as a selected drug but for subparagraph (B)(iii) and the selected drug publication date with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected drug on such list but for this subsection, the Secretary determines that such biosimilar biological product has not been licensed and marketed-
In no case shall the Secretary delay the inclusion of a biological product on the list published under subsection (a) for more than 2 years.
In the case of a biological product for which the inclusion on the list published pursuant to subsection (a) was delayed by 1 year under subparagraph (A) and for which there would have been a change in status to a long-monopoly drug (as defined in section 1320f-3(c)(5) of this title) if such biological product had been a selected drug, in no case may the Secretary provide for a second 1-year delay under subparagraph (B)(iii).
In no case shall the Secretary delay the inclusion of a biological product on the list published under subsection (a) if more than 1 year has elapsed since the biosimilar biological product has been licensed under section 262(k) of this title and marketing has not commenced for such biosimilar biological product.
In no case shall the Secretary delay the inclusion of a biological product as a selected drug on the list published under subsection (a) if Secretary determined that the manufacturer of the biosimilar biological product described in paragraph (1)(A)-
For purposes of this subsection, there is a high likelihood described in paragraph (1) or paragraph (2), as applicable, if the Secretary finds that-
For purposes of subparagraphs (B)(ii)(II) and (C)(ii) of paragraph (2), in the case of a biological product for which the inclusion on the list under subsection (a) was delayed under this subsection and for which the Secretary has negotiated and entered into an agreement under section 1320f-2 of this title with respect to such biological product, the manufacturer shall be required to pay a rebate to the Secretary at such time and in such manner as determined by the Secretary.
Subject to subparagraph (C), the amount of the rebate under subparagraph (A) with respect to a biological product shall be equal to the estimated amount-
In the case of a biological product with respect to which a rebate is required to be paid under this paragraph, if such biological product qualifies as a long-monopoly drug (as defined in section 1320f-3(c)(5) of this title) at the time of its inclusion on the list published under subsection (a), in determining the amount of the rebate for such biological product under subparagraph (B), the amount described in clause (ii) shall be substituted for the maximum fair price described in clause (i)(I) or (ii)(I) of such subparagraph (B), as applicable.
The amount described in this clause is an amount equal to 65 percent of the average non-Federal average manufacturer price for the biological product for 2021 (or, in the case that there is not an average non-Federal average manufacturer price available for such biological product for 2021, for the first full year following the market entry for such biological product), increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) from September 2021 (or December of such first full year following the market entry), as applicable, to September of the year prior to the selected drug publication date with respect to the initial price applicability year that would have applied but for this subsection.
Amounts paid as rebates under this paragraph shall be deposited into-
In this subsection, the term "biosimilar biological product" has the meaning given such term in section 1395w-3a(c)(6) of this title.
1See References in Text note below.
2So in original.
42 U.S.C. § 1320f-1
EDITORIAL NOTES
REFERENCES IN TEXTSection 52 of the Internal Revenue Code of 1986, referred to in subsecs. (d)(2)(B)(i) and (f)(1)(C)(i), is classified to section 52 of Title 26, Internal Revenue Code.Section 262(a) of this title, referred to in subsec. (e)(2)(B)(ii)(I), was in the original "section 351(a) of such Act" and was translated as reading "section 351(a) of the Public Health Service Act", to reflect the probable intent of Congress.Section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (f)(1)(B)(ii)(I)(bb), is section 1112 of Pub. L. 108-173 which is set out in a note under section 355 of Title 21, Food and Drugs.
AMENDMENTS2022-Subsec. (a). Pub. L. 117-169, §11002(a)(1)(A), inserted "and subsection (b)(3)" after "the previous sentence" in concluding provisions.Subsec. (b)(1)(C). Pub. L. 117-169, §11002(a)(1)(B)(i), added subpar. (C).Subsec. (b)(3). Pub. L. 117-169, §11002(a)(1)(B)(ii), added par. (3). Subsec. (f). Pub. L. 117-169, §11002(a)(1)(C), added subsec. (f).
STATUTORY NOTES AND RELATED SUBSIDIARIES
IMPLEMENTATION FOR 2026 THROUGH 2028 Pub. L. 117-169, title I, §11002(c), Aug. 16, 2022, 136 Stat. 1862, provided that: "The Secretary of Health and Human Services shall implement this section [amending this section and sections 1320f-2, 1320f-5 to 1320f-7, and 1396r-8 of this title], including the amendments made by this section, for 2026, 2027, and 2028 by program instruction or other forms of program guidance."
- Secretary
- The term "Secretary" means the Secretary of Housing and Urban Development.1See References in Text note below.
- United States
- The term "United States" means (but only for purposes of subparagraphs (A) and (B) of this paragraph) the fifty States and the District of Columbia.