42 U.S.C. § 1396r-8
In order for payment to be available under section 1396b(a) of this title or under part B of subchapter XVIII for covered outpatient drugs of a manufacturer, the manufacturer must have entered into and have in effect a rebate agreement described in subsection (b) with the Secretary, on behalf of States (except that, the Secretary may authorize a State to enter directly into agreements with a manufacturer), and must meet the requirements of paragraph (5) (with respect to drugs purchased by a covered entity on or after the first day of the first month that begins after November 4, 1992) and paragraph (6). Any agreement between a State and a manufacturer prior to April 1, 1991, shall be deemed to have been entered into on January 1, 1991, and payment to such manufacturer shall be retroactively calculated as if the agreement between the manufacturer and the State had been entered into on January 1, 1991. If a manufacturer has not entered into such an agreement before March 1, 1991, such an agreement, subsequently entered into, shall become effective as of the date on which the agreement is entered into or, at State option, on any date thereafter on or before the first day of the calendar quarter that begins more than 60 days after the date the agreement is entered into.
Paragraph (1) shall first apply to drugs dispensed under this subchapter on or after January 1, 1991.
Paragraph (1), and section 1396b(i)(10)(A) of this title, shall not apply to the dispensing of a single source drug or innovator multiple source drug if (A)(i) the State has made a determination that the availability of the drug is essential to the health of beneficiaries under the State plan for medical assistance; (ii) such drug has been given a rating of 1-A by the Food and Drug Administration; and (iii)(I) the physician has obtained approval for use of the drug in advance of its dispensing in accordance with a prior authorization program described in subsection (d), or (II) the Secretary has reviewed and approved the State's determination under subparagraph (A); or (B) the Secretary determines that in the first calendar quarter of 1991, there were extenuating circumstances. The preceding sentence shall not apply to a single source drug or innovator multiple source drug of a manufacturer for any period described in section 5000D(c)(1) of the Internal Revenue Code of 1986 with respect to the manufacturer.
In the case of a rebate agreement in effect between a State and a manufacturer on November 5, 1990, such agreement, for the initial agreement period specified therein, shall be considered to be a rebate agreement in compliance with this section with respect to that State, if the State agrees to report to the Secretary any rebates paid pursuant to the agreement and such agreement provides for a minimum aggregate rebate of 10 percent of the State's total expenditures under the State plan for coverage of the manufacturer's drugs under this subchapter. If, after the initial agreement period, the State establishes to the satisfaction of the Secretary that an agreement in effect on November 5, 1990, provides for rebates that are at least as large as the rebates otherwise required under this section, and the State agrees to report any rebates under the agreement to the Secretary, the agreement shall be considered to be a rebate agreement in compliance with the section for the renewal periods of such agreement.
A manufacturer meets the requirements of this paragraph if the manufacturer has entered into an agreement with the Secretary that meets the requirements of section 256b of this title with respect to covered outpatient drugs purchased by a covered entity on or after the first day of the first month that begins after November 4, 1992.
In this subsection, the term "covered entity" means an entity described in section 256b(a)(4) of this title.
If the Secretary does not establish a mechanism under section 256b(a)(5)(A) of this title within 12 months of November 4, 1992, the following requirements shall apply:
Each covered entity shall inform the single State agency under section 1396a(a)(5) of this title when it is seeking reimbursement from the State plan for medical assistance described in section 1396d(a)(12) of this title with respect to a unit of any covered outpatient drug which is subject to an agreement under section 256b(a) of this title.
Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.
In determining whether an agreement under subparagraph (A) meets the requirements of section 256b of this title, the Secretary shall not take into account any amendments to such section that are enacted after November 4, 1992.
A manufacturer is deemed to meet the requirements of this paragraph if the manufacturer establishes to the satisfaction of the Secretary that the manufacturer would comply (and has offered to comply) with the provisions of section 256b of this title (as in effect immediately after November 4, 1992) and would have entered into an agreement under such section (as such section was in effect at such time), but for a legislative change in such section after November 4, 1992.
A manufacturer meets the requirements of this paragraph if the manufacturer complies with the provisions of section 8126 of title 38, including the requirement of entering into a master agreement with the Secretary of Veterans Affairs under such section.
In determining whether a master agreement described in subparagraph (A) meets the requirements of section 8126 of title 38, the Secretary shall not take into account any amendments to such section that are enacted after November 4, 1992.
A manufacturer is deemed to meet the requirements of this paragraph if the manufacturer establishes to the satisfaction of the Secretary that the manufacturer would comply (and has offered to comply) with the provisions of section 8126 of title 38, (as in effect immediately after November 4, 1992) and would have entered into an agreement under such section (as such section was in effect at such time), but for a legislative change in such section after November 4, 1992.
In order for payment to be available under section 1396b(a) of this title for a covered outpatient drug that is a single source drug that is physician administered under this subchapter (as determined by the Secretary), and that is administered on or after January 1, 2006, the State shall provide for the collection and submission of such utilization data and coding (such as J-codes and National Drug Code numbers) for each such drug as the Secretary may specify as necessary to identify the manufacturer of the drug in order to secure rebates under this section for drugs administered for which payment is made under this subchapter.
Not later than January 1, 2007, the Secretary shall publish a list of the 20 physician administered multiple source drugs that the Secretary determines have the highest dollar volume of physician administered drugs dispensed under this subchapter. The Secretary may modify such list from year to year to reflect changes in such volume.
In order for payment to be available under section 1396b(a) of this title for a covered outpatient drug that is a multiple source drug that is physician administered (as determined by the Secretary), that is on the list published under clause (i), and that is administered on or after January 1, 2008, the State shall provide for the submission of such utilization data and coding (such as J-codes and National Drug Code numbers) for each such drug as the Secretary may specify as necessary to identify the manufacturer of the drug in order to secure rebates under this section.
Not later than January 1, 2007, the information shall be submitted under subparagraphs (A) and (B)(ii) using National Drug Code codes unless the Secretary specifies that an alternative coding system should be used.
The Secretary may delay the application of subparagraph (A) or (B)(ii), or both, in the case of a State to prevent hardship to States which require additional time to implement the reporting system required under the respective subparagraph.
A rebate agreement under this subsection shall require the manufacturer to provide, to each State plan approved under this subchapter, a rebate for a rebate period in an amount specified in subsection (c) for covered outpatient drugs of the manufacturer dispensed after December 31, 1990, for which payment was made under the State plan for such period, including such drugs dispensed to individuals enrolled with a medicaid managed care organization if the organization is responsible for coverage of such drugs. Such rebate shall be paid by the manufacturer not later than 30 days after the date of receipt of the information described in paragraph (2) for the period involved.
Amounts received by a State under this section (or under an agreement authorized by the Secretary under subsection (a)(1) or an agreement described in subsection (a)(4)) in any quarter, including amounts received by a State under subsection (c)(4), shall be considered to be a reduction in the amount expended under the State plan in the quarter for medical assistance for purposes of section 1396b(a)(1) of this title.
In addition to the amounts applied as a reduction under subparagraph (B), for rebate periods beginning on or after January 1, 2010, during a fiscal year, the Secretary shall reduce payments to a State under section 1396b(a) of this title in the manner specified in clause (ii), in an amount equal to the product of-
The Secretary shall adjust such payment reduction for a calendar quarter to the extent the Secretary determines, based upon subsequent utilization and other data, that the reduction for such quarter was greater or less than the amount of payment reduction that should have been made.
The amount of the payment reduction under clause (i) for a State for a quarter shall be deemed an overpayment to the State under this subchapter to be disallowed against the State's regular quarterly draw for all Medicaid spending under section 1396b(d)(2) of this title. Such a disallowance is not subject to a reconsideration under section 1316(d) of this title.
Each State agency under this subchapter shall report to each manufacturer not later than 60 days after the end of each rebate period and in a form consistent with a standard reporting format established by the Secretary, information on the total number of units of each dosage form and strength and package size of each covered outpatient drug dispensed after December 31, 1990, for which payment was made under the plan during the period, including such information reported by each medicaid managed care organization, and shall promptly transmit a copy of such report to the Secretary.
A manufacturer may audit the information provided (or required to be provided) under subparagraph (A). Adjustments to rebates shall be made to the extent that information indicates that utilization was greater or less than the amount previously specified.
Each manufacturer with an agreement in effect under this section shall report to the Secretary-
for a drug or biological described in subparagraph (C), (D), (E), or (G) of section 1395u(o)(1) of this title or section 1395rr(b)(14)(B) of this title, and, for calendar quarters beginning on or after January 1, 2007 and only with respect to the information described in subclause (III), for covered outpatient drugs;
Information reported under this subparagraph is subject to audit by the Inspector General of the Department of Health and Human Services. Beginning July 1, 2006, the Secretary shall provide on a monthly basis to States under subparagraph (D)(iv) the most recently reported average manufacturer prices for single source drugs and for multiple source drugs and shall, on at least a quarterly basis, update the information posted on the website under subparagraph (D)(v) (relating to the weighted average of the most recently reported monthly average manufacturer prices). For purposes of applying clause (iii), for calendar quarters beginning on or after January 1, 2022, a drug or biological described in the flush matter following such clause includes items, services, supplies, and products that are payable under part B of subchapter XVIII as a drug or biological.
The Secretary may survey wholesalers and manufacturers that directly distribute their covered outpatient drugs, when necessary, to verify manufacturer prices and manufacturer's average sales prices (including wholesale acquisition cost) if required to make payment reported under subparagraph (A). The Secretary may impose a civil monetary penalty in an amount not to exceed $100,000 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 a survey under this subparagraph or knowingly provides false information. The provisions of section 1320a-7a of this title (other than subsections (a) (with respect to amounts of penalties or additional assessments) 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 1320a-7a(a) of this title.
In the case of a manufacturer with an agreement under this section that fails to provide information required under subparagraph (A) on a timely basis, the amount of the penalty shall be 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, if such information is not reported within 90 days of the deadline imposed, the agreement shall be suspended for services furnished after the end of such 90-day period and until the date such information is reported (but in no case shall such suspension be for a period of less than 30 days).
Any manufacturer with an agreement under this section that knowingly provides false information, including information related to drug pricing, drug product information, and data related to drug pricing or drug product information, is subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information. Such civil money penalties are in addition to other penalties as may be prescribed by law. The provisions of section 1320a-7a of this title (other than subsections (a), (b), (f)(3), and (f)(4)) 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 1320a-7a(a) of this title.
Any manufacturer with an agreement under this section that knowingly (as defined in section 1003.110 of title 42, Code of Federal Regulations (or any successor regulation)) misclassifies a covered outpatient drug, such as by knowingly submitting incorrect drug product information, is subject to a civil money penalty for each covered outpatient drug that is misclassified in an amount not to exceed 2 times the amount of the difference between-
The civil money penalties described in subclause (I) are in addition to other penalties as may be prescribed by law and any other recovery of the underlying underpayment for rebates due under this section or the terms of the rebate agreement as determined by the Secretary.
Each year the Secretary shall retain, in addition to any amount retained by the Secretary to recoup investigation and litigation costs related to the enforcement of the civil money penalties under this subparagraph and subsection (c)(4)(B)(ii)(III), an amount equal to 25 percent of the total amount of civil money penalties collected under this subparagraph and subsection (c)(4)(B)(ii)(III) for the year, and such retained amount shall be available to the Secretary, without further appropriation and until expended, for activities related to the oversight and enforcement of this section and agreements under this section, including-
Notwithstanding any other provision of law, information disclosed by manufacturers or wholesalers under this paragraph or under an agreement with the Secretary of Veterans Affairs described in subsection (a)(6)(A) (other than the wholesale acquisition cost for purposes of carrying out section 1395w-3a of this title) is confidential and shall not be disclosed by the Secretary or the Secretary of Veterans Affairs or a State agency (or contractor therewith) in a form which discloses the identity of a specific manufacturer or wholesaler, prices charged for drugs by such manufacturer or wholesaler, except-
The previous sentence shall also apply to information disclosed under section 1395w-102(d)(2) or 1395w-104(c)(2)(G) of this title and drug pricing data reported under the first sentence of section 1395w-141(i)(1) of this title. Any information disclosed to the Executive Director of the Medicare Payment Advisory Commission or the Executive Director of the Medicaid and CHIP Payment and Access Commission pursuant to this subparagraph shall not be disclosed by either such Executive Director in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler. Such information also shall not be disclosed by either such Executive Director to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler.
A rebate agreement shall be effective for an initial period of not less than 1 year and shall be automatically renewed for a period of not less than one year unless terminated under subparagraph (B).
The Secretary may provide for termination of a rebate agreement for violation of the requirements of the agreement or other good cause shown. Such termination shall not be effective earlier than 60 days after the date of notice of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, but such hearing shall not delay the effective date of the termination.
A manufacturer may terminate a rebate agreement under this section for any reason. Any such termination shall not be effective until the calendar quarter beginning at least 60 days after the date the manufacturer provides notice to the Secretary.
Any termination under this subparagraph shall not affect rebates due under the agreement before the effective date of its termination.
In the case of a termination under this subparagraph, the Secretary shall provide notice of such termination to the States within not less than 30 days before the effective date of such termination.
The provisions of this subparagraph shall apply to the terminations of agreements described in section 256b(a)(1) of this title and master agreements described in section 8126(a) of title 38.
In the case of any rebate agreement with a manufacturer under this section which is terminated, another such agreement with the manufacturer (or a successor manufacturer) may not be entered into until a period of 1 calendar quarter has elapsed since the date of the termination, unless the Secretary finds good cause for an earlier reinstatement of such an agreement.
Except as provided in paragraph (2), the amount of the rebate specified in this subsection for a rebate period (as defined in subsection (k)(8)) with respect to each dosage form and strength of a single source drug or an innovator multiple source drug shall be equal to the product of-
for the rebate period.
For purposes of subparagraph (A)(ii)(II), the "minimum rebate percentage" for rebate periods beginning-
In no case shall the amount applied under subparagraph (A)(ii) for a rebate period beginning-
In the case of a single source drug or an innovator multiple source drug described in subclause (II), the minimum rebate percentage for rebate periods specified in clause (i)(VI) is 17.1 percent.
For purposes of subclause (I), a single source drug or an innovator multiple source drug described in this subclause is any of the following drugs:
For purposes of this section-
The term "best price" means, with respect to a single source drug or innovator multiple source drug of a manufacturer (including the lowest price available to any entity for any such drug of a manufacturer that is sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(c)] ), the lowest price available from the manufacturer during the rebate period to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity within the United States, excluding-
The term "best price"-
With respect to a covered entity described in section 256b(a)(4)(L) of this title, any drug purchased for inpatient use shall be subject to the auditing and recordkeeping requirements described in section 256b(a)(5)(C) of this title.
For purposes of subparagraph (C)(ii)(III) and subsection (b)(3)(A)(iii)(III), only sales by a manufacturer of covered outpatient drugs at nominal prices to the following shall be considered to be sales at a nominal price or merely nominal in amount:
The factors described in this clause with respect to a facility or entity are the following:
Clause (i) shall not apply with respect to sales by a manufacturer at a nominal price of covered outpatient drugs pursuant to a master agreement under section 8126 of title 38.
Nothing in this subparagraph shall be construed to alter any existing statutory or regulatory prohibition on services with respect to an entity described in clause (i)(IV), including the prohibition set forth in section 300a-6 of this title.
The amount of the rebate specified in this subsection for a rebate period, with respect to each dosage form and strength of a single source drug or an innovator multiple source drug, shall be increased by an amount equal to the product of-
In the case of a covered outpatient drug approved by the Food and Drug Administration after October 1, 1990, clause (ii)(II) of subparagraph (A) shall be applied by substituting "the first full calendar quarter after the day on which the drug was first marketed" for "the calendar quarter beginning July 1, 1990" and "the month prior to the first month of the first full calendar quarter after the day on which the drug was first marketed" for "September 1990".
In the case of a drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the rebate obligation for a rebate period with respect to such drug under this subsection shall be the greater of the amount described in clause (ii) for such drug or the amount described in clause (iii) for such drug.
For purposes of clause (i), the amount described in this clause with respect to a drug described in clause (i) and rebate period is the amount computed under paragraph (1) for such drug, increased by the amount computed under subparagraph (A) and, as applicable, subparagraph (B) for such drug and rebate period.
For purposes of clause (i), the amount described in this clause with respect to a drug described in clause (i) and rebate period is the amount computed under paragraph (1) for such drug, increased by the product of-
In this subparagraph, the term "line extension" means, with respect to a drug, a new formulation of the drug, such as an extended release formulation, but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation.
In no case shall the sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple source drug for a rebate period beginning after December 31, 2009, and before January 1, 2024, exceed 100 percent of the average manufacturer price of the drug.
Except as provided in subparagraph (C), the amount of the rebate paid to a State for a rebate period with respect to each dosage form and strength of covered outpatient drugs (other than single source drugs and innovator multiple source drugs) shall be equal to the product of-
For purposes of subparagraph (A)(i), the "applicable percentage" for rebate periods beginning-
The amount of the rebate specified in this paragraph for a rebate period, with respect to each dosage form and strength of a covered outpatient drug other than a single source drug or an innovator multiple source drug of a manufacturer, shall be increased in the manner that the rebate for a dosage form and strength of a single source drug or an innovator multiple source drug is increased under subparagraphs (A) and (D) of paragraph (2), except as provided in clause (ii).
In applying subparagraphs (A) and (D) of paragraph (2) under clause (i)-
In applying paragraph (2)(A)(ii)(II) under clause (i) with respect to a covered outpatient drug that is first marketed as a drug other than a single source drug or an innovator multiple source drug after April 1, 2013, such paragraph shall be applied-
In this subsection, the term "applicable quarter" means, with respect to a drug described in clause (iii), the fifth full calendar quarter after which the drug is marketed as a drug other than a single source drug or an innovator multiple source drug.
If the Secretary determines that a manufacturer with an agreement under this section paid a lower per-unit rebate amount to a State for a rebate period as a result of the misclassification by the manufacturer of a covered outpatient drug (without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made) than the per-unit rebate amount that the manufacturer would have paid to the State if the drug had been correctly classified, the manufacturer shall pay to the State an amount equal to the product of-
If the Secretary determines that a manufacturer with an agreement under this section has misclassified a covered outpatient drug (without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made), the Secretary shall notify the manufacturer of the misclassification and require the manufacturer to correct the misclassification in a timely manner.
If, after receiving notice of a misclassification from the Secretary under clause (i), a manufacturer fails to correct the misclassification by such time as the Secretary shall require, until the manufacturer makes such correction, the Secretary may do any or all of the following:
The Secretary shall submit a report to Congress on at least an annual basis that includes information on the covered outpatient drugs that have been identified as misclassified, any steps taken to reclassify such drugs, the actions the Secretary has taken to ensure the payment of any rebate amounts which were unpaid as a result of such misclassification, and a disclosure of expenditures from the fund created in subsection (b)(3)(C)(iv), including an accounting of how such funds have been allocated and spent in accordance with such subsection.
The Secretary shall make the information contained in the report required under clause (i) available to the public on a timely basis.
Actions taken and penalties imposed under this clause shall be in addition to other remedies available to the Secretary including terminating the manufacturer's rebate agreement for noncompliance with the terms of such agreement and shall not exempt a manufacturer from, or preclude the Secretary from pursuing, any civil money penalty under this subchapter or subchapter XI, or any other penalty or action as may be prescribed by law.
The following drugs or classes of drugs, or their medical uses, may be excluded from coverage or otherwise restricted:
The Secretary shall, by regulation, periodically update the list of drugs or classes of drugs described in paragraph (2) or their medical uses, which the Secretary has determined, based on data collected by surveillance and utilization review programs of State medical assistance programs, to be subject to clinical abuse or inappropriate use.
A State may establish a formulary if the formulary meets the following requirements:
A prior authorization program established by a State under paragraph (5) is not a formulary subject to the requirements of this paragraph.
A State plan under this subchapter may require, as a condition of coverage or payment for a covered outpatient drug for which Federal financial participation is available in accordance with this section, with respect to drugs dispensed on or after July 1, 1991, the approval of the drug before its dispensing for any medically accepted indication (as defined in subsection (k)(6)) only if the system providing for such approval-
A State may impose limitations, with respect to all such drugs in a therapeutic class, on the minimum or maximum quantities per prescription or on the number of refills, if such limitations are necessary to discourage waste, and may address instances of fraud or abuse by individuals in any manner authorized under this chapter.
The following drugs or classes of drugs, or their medical uses, shall not be excluded from coverage:
During the period beginning on January 1, 1991, and ending on December 31, 1994-
If a State is not in compliance with the regulations described in paragraph (1)(B), paragraph (1)(A) shall not apply to such State until such State is in compliance with such regulations.
This section shall not supersede or affect provisions in effect prior to January 1, 1991, or after December 31, 1994, relating to any maximum allowable cost limitation established by a State for payment by the State for covered outpatient drugs, and rebates shall be made under this section without regard to whether or not payment by the State for such drugs is subject to such a limitation or the amount of such a limitation.
Subject to paragraph (5), the Secretary shall establish a Federal upper reimbursement limit for each multiple source drug for which the FDA has rated three or more products therapeutically and pharmaceutically equivalent, regardless of whether all such additional formulations are rated as such and shall use only such formulations when determining any such upper limit.
The Secretary shall calculate the Federal upper reimbursement limit established under paragraph (4) as no less than 175 percent of the weighted average (determined on the basis of utilization) of the most recently reported monthly average manufacturer prices for pharmaceutically and therapeutically equivalent multiple source drug products that are available for purchase by retail community pharmacies on a nationwide basis. The Secretary shall implement a smoothing process for average manufacturer prices. Such process shall be similar to the smoothing process used in determining the average sales price of a drug or biological under section 1395w-3a of this title.
The Secretary may contract services for-
If contractor notifies the Secretary under subparagraph (A)(ii) that a drug product described in such subparagraph has become generally available, the Secretary shall make a determination, within 7 days after receiving such notification, as to whether the product is now described in subsection (e)(4).4
In contracting for such services, the Secretary shall competitively bid for an outside vendor that has a demonstrated history in-
In contracting for such services, the Secretary may waive such provisions of the Federal Acquisition Regulation as are necessary for the efficient implementation of this subsection, other than provisions relating to confidentiality of information and such other provisions as the Secretary determines appropriate.
A contract with a vendor under this paragraph shall include such terms and conditions as the Secretary shall specify, including the following:
Information on retail survey prices obtained under this paragraph, including applicable information on single source drugs, shall be provided to States on at least a monthly basis. The Secretary shall devise and implement a means for providing access to each State agency designated under section 1396a(a)(5) of this title with responsibility for the administration or supervision of the administration of the State plan under this subchapter of the retail survey price determined under this paragraph.
Each State shall annually report to the Secretary information on-
The Secretary annually shall compare, for the 50 most widely prescribed drugs identified by the Secretary, the national retail sales price data (collected under paragraph (1)) for such drugs with data on prices under this subchapter for each such drug for each State.
The Secretary shall submit to Congress and the States full information regarding the annual rankings made under subparagraph (A).
Out of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary of Health and Human Services $5,000,000 for each of fiscal years 2006 through 2010 to carry out this subsection.
Each drug use review program shall meet the following requirements for covered outpatient drugs:
Nothing in this clause shall be construed as requiring a pharmacist to provide consultation when an individual receiving benefits under this subchapter or caregiver of such individual refuses such consultation, or to require verification of the offer to provide consultation or a refusal of such offer.
The program shall provide, through its mechanized drug claims processing and information retrieval systems (approved by the Secretary under section 1396b(r) of this title) or otherwise, for the ongoing periodic examination of claims data and other records in order to identify patterns of fraud, abuse, gross overuse, excessive utilization, inappropriate or medically unnecessary care, or prescribing or billing practices that indicate abuse or excessive utilization, among physicians, pharmacists and individuals receiving benefits under this subchapter, or associated with specific drugs or groups of drugs.
The program shall, on an ongoing basis, assess data on drug use against explicit predetermined standards (using the compendia and literature referred to in subsection7 (1)(B) as the source of standards for such assessment) including but not limited to monitoring for therapeutic appropriateness, overutilization and underutilization, appropriate use of generic products, therapeutic duplication, drug-disease contraindications, drug-drug interactions, incorrect drug dosage or duration of drug treatment, and clinical abuse/misuse and, as necessary, introduce remedial strategies, in order to improve the quality of care and to conserve program funds or personal expenditures.
The program shall, through its State drug use review board established under paragraph (3), either directly or through contracts with accredited health care educational institutions, State medical societies or State pharmacists associations/societies or other organizations as specified by the State, and using data provided by the State drug use review board on common drug therapy problems, provide for active and ongoing educational outreach programs (including the activities described in paragraph (3)(C)(iii) of this subsection) to educate practitioners on common drug therapy problems with the aim of improving prescribing or dispensing practices.
Each State shall provide for the establishment of a drug use review board (hereinafter referred to as the "DUR Board") either directly or through a contract with a private organization.
The membership of the DUR Board shall include health care professionals who have recognized knowledge and expertise in one or more of the following:
The membership of the DUR Board shall be made up at least 1/3 but no more than 51 percent licensed and actively practicing physicians and at least 1/3 ***8 licensed and actively practicing pharmacists.
The activities of the DUR Board shall include but not be limited to the following:
The Board shall re-evaluate interventions after an appropriate period of time to determine if the intervention improved the quality of drug therapy, to evaluate the success of the interventions and make modifications as necessary.
Each State shall require the DUR Board to prepare a report on an annual basis. The State shall submit a report on an annual basis to the Secretary which shall include a description of the activities of the Board, including the nature and scope of the prospective and retrospective drug use review programs, a summary of the interventions used, an assessment of the impact of these educational interventions on quality of care, and an estimate of the cost savings generated as a result of such program. The Secretary shall utilize such report in evaluating the effectiveness of each State's drug use review program.
In accordance with chapter 35 of title 44 (relating to coordination of Federal information policy), the Secretary shall encourage each State agency to establish, as its principal means of processing claims for covered outpatient drugs under this subchapter, a point-of-sale electronic claims management system, for the purpose of performing on-line, real time eligibility verifications, claims data capture, adjudication of claims, and assisting pharmacists (and other authorized persons) in applying for and receiving payment.
In order to carry out paragraph (1)-
In this section-
Subject to subparagraph (B), the term "average manufacturer price" means, with respect to a covered outpatient drug of a manufacturer for a rebate period, the average price paid to the manufacturer for the drug in the United States by-
The average manufacturer price for a covered outpatient drug shall exclude-
Notwithstanding clause (i), any other discounts, rebates, payments, or other financial transactions that are received by, paid by, or passed through to, retail community pharmacies shall be included in the average manufacturer price for a covered outpatient drug.
In the case of a manufacturer that approves, allows, or otherwise permits any drug of the manufacturer to be sold under the manufacturer's new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(c)], such term shall be exclusive of the average price paid for such drug by wholesalers for drugs distributed to retail community pharmacies.
Subject to the exceptions in paragraph (3), the term "covered outpatient drug" means-
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 subchapter as part of payment for the following and not as direct reimbursement for the drug):
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 biological9 used for a medical indication which is not a medically accepted indication. 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.
If a State plan for medical assistance under this subchapter includes coverage of prescribed drugs as described in section 1396d(a)(12) of this title and permits coverage of drugs which may be sold without a prescription (commonly referred to as "over-the-counter" drugs), if they are prescribed by a physician (or other person authorized to prescribe under State law), such a drug shall be regarded as a covered outpatient drug.
The term "manufacturer" means any entity which is engaged in-
Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law.
The term "medically accepted indication" means any use for a covered outpatient drug which is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.] or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(i).
The term "multiple source drug" means, with respect to a rebate period, a covered outpatient drug, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4), for which there2 at least 1 other drug product which-
The term "innovator multiple source drug" means a multiple source drug that is marketed under a new drug application approved by the Food and Drug Administration, unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation)).
The term "noninnovator multiple source drug" means a multiple source drug that is not an innovator multiple source drug.
The term "single source drug" means a covered outpatient drug, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4), which is produced or distributed under a new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation)). Such term also includes a covered outpatient drug that is a biological product licensed, produced, or distributed under a biologics license application approved by the Food and Drug Administration.
Subparagraph (A)(i)(II) shall not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in subparagraph (A)(i)(I), in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent, as defined in subparagraph (C).
For purposes of this paragraph-
The term "rebate period" means, with respect to an agreement under subsection (a), a calendar quarter or other period specified by the Secretary with respect to the payment of rebates under such agreement.
The term "State agency" means the agency designated under section 1396a(a)(5) of this title to administer or supervise the administration of the State plan for medical assistance.
The term "retail community pharmacy" means an independent pharmacy, a chain pharmacy, a supermarket pharmacy, or a mass merchandiser pharmacy that is licensed as a pharmacy by the State and that dispenses medications to the general public at retail prices. Such term does not include a pharmacy that dispenses prescription medications to patients primarily through the mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or pharmacy benefit managers.
The term "wholesaler" means a drug wholesaler that is engaged in wholesale distribution of prescription drugs to retail community pharmacies, including (but not limited to) repackers, distributors, own-label distributors, private-label distributors, jobbers, brokers, warehouses (including distributor's warehouses, chain drug warehouses, and wholesale drug warehouses) independent wholesale drug traders, and retail community pharmacies that conduct wholesale distributions.
1So in original. Probably should be followed by a comma.
2So in original. Probably should be followed by "is".
3So in original. Probably should be followed by a semicolon.
4See References in Text note below.
5So in original. The semicolon probably should be a comma.
6See 1993 Amendment note below.
7So in original. Probably should be "paragraph".
8So in original.
9So in original. Probably should be "biological product".
42 U.S.C. § 1396r-8
EDITORIAL NOTES
REFERENCES IN TEXTThe Internal Revenue Code of 1986, referred to in subsecs. (a)(3) and (c)(1)(D)(i)(IV)(aa), is classified generally to Title 26, Internal Revenue Code. The amendments made by subsections (a)(1), (b), (c), and (d) of section 2501 of the Patient Protection and Affordable Care Act, referred to in subsec. (b)(1)(C)(i)(II), mean the amendments made by section 2501(a)(1), (b), (c), and (d) of Pub. L. 111-148 which amended this section and section 1396b of this title.Section 256b(a)(4) of this title, referred to in subsec. (c)(1)(D)(i)(IV)(bb), was in the original "section 340(B)(a)(4) of the Public Health Service Act", and was translated as meaning section 340B(a)(4) of the Public Health Service Act, which defines "covered entity", to reflect the probable intent of Congress.The Federal Food, Drug, and Cosmetic Act, referred to in subsecs. (d)(4)(C) and (k)(6), is act June 25, 1938, ch. 675, 52 Stat. 1040, which is classified generally to chapter 9 (§301 et seq.) of Title 21, Food and Drugs. For complete classification of this Act to the Code, see section 301 of Title 21 and Tables. Paragraph (4) and subsection (e)(4), referred to in subsecs. (e)(5) and (f)(1)(B), probably means text that was editorially designated as par. (4) of subsec. (e). See 1993 Amendment note below.Section 507 of the Federal Food, Drug, and Cosmetic Act, referred to in subsec. (k)(2)(A)(i), was repealed by Pub. L. 105-115, title I, §125(b)(1), Nov. 21, 1997, 111 Stat. 2325.Section 107(c)(3) of the Drug Amendments of 1962, referred to in subsec. (k)(2)(A)(iii)(I), is section 107(c)(3) of Pub. L. 87-781 which is set out in an Effective Date of 1962 Amendment note under section 321 of Title 21, Food and Drugs.Section 506 of the Federal Food, Drug, and Cosmetic Act, referred to in subsec. (k)(2)(C), was repealed and a new section 506 enacted by Pub. L. 105-115, title I, §§112(a), Nov. 21, 1997, 125, Nov. 21, 1997, 111 Stat. 2309, 2325, which no longer relates to insulin.
CODIFICATIONSubsec. (i) of this section, which required the Secretary to transmit to the Committee on Finance of the Senate, the Committee on Energy and Commerce of the House of Representatives, and the Committees on Aging of the Senate and the House of Representatives an annual report on the operation of this section in the preceding fiscal year, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104-66 set out as a note under section 1113 of Title 31, Money and Finance. See, also, item 9 on page 93 of House Document No. 103-7.
PRIOR PROVISIONSA prior section 1927 of act Aug. 14, 1935, was renumbered section 1939 and is classified to section 1396v of this title.
AMENDMENTS2022-Subsec. (a)(3). Pub. L. 117-169, §11001(b)(1)(G)(ii), inserted at end "The preceding sentence shall not apply to a single source drug or innovator multiple source drug of a manufacturer for any period described in section 5000D(c)(1) of the Internal Revenue Code of 1986 with respect to the manufacturer." Subsec. (b)(3)(D)(i). Pub. L. 117-169, §11102(b)(3), substituted ",section 1320f-1(f) of this title, including rebates under paragraph (4) of such section, or section 1395w-114b of this title" for "or section 1320f-1(f) of this title, including rebates under paragraph (4) of such section". Pub. L. 117-169, §11101(c)(3), inserted "and the rebate" after "the payment amount". Pub. L. 117-169, §11002(b), substituted "or to carry out section 1395w-3b of this title or section 1320f-1(f) of this title, including rebates under paragraph (4) of such section" for "or to carry out section 1395w-3b of this title". Subsec. (c)(1)(C)(i)(VI). Pub. L. 117-169, §11201(e)(8)(A), inserted before period at end "or under the manufacturer discount program under section 1395w-114c of this title". Pub. L. 117-169, §11001(b)(2)(A), substituted "subject to clause (ii)(V), any prices charged" for "any prices charged". Subsec. (c)(1)(C)(ii)(I). Pub. L. 117-169, §11102(b)(2), substituted ",section 1395w-3a(i) of this title, or section 1395w-114b of this title" for "or section 1395w-3a(i) of this title". Pub. L. 117-169, §11101(c)(2), inserted "or section 1395w-3a(i) of this title" after "this section". Subsec. (c)(1)(C)(ii)(V). Pub. L. 117-169, §11001(b)(2)(B), added subcl. (V).Subsec. (k)(1)(B)(i)(V). Pub. L. 117-169, §11201(e)(8)(B), inserted before period at end "or under section 1395w-114c of this title".Subsec. (k)(1)(B)(i)(VI). Pub. L. 117-169, §11001(b)(3), added subcl. (VI). Subsec. (k)(1)(B)(i)(VII). Pub. L. 117-169, §11101(c)(4), added subcl. (VII). Subsec. (k)(1)(B)(i)(VIII). Pub. L. 117-169, §11102(b)(4), added subcl. (VIII). Conforming amendments striking "and" at the end of subcl. (VI) and substituting semicolon for period at the end of subcl. (VII) could not be executed as directed after the amendment by Pub. L. 117-169, §11101(c)(4)(B), (C).2021-Subsec. (c)(2)(D). Pub. L. 117-2, §9816, inserted "and before January 1, 2024," after "December 31, 2009,".Subsec. (d)(7)(E). Pub. L. 117-2, §9811(a)(4)(B), added subpar. (E). 2020-Subsec. (b)(3)(A). Pub. L. 116-260, §401(c)(1), inserted at end of concluding provisions "For purposes of applying clause (iii), for calendar quarters beginning on or after January 1, 2022, a drug or biological described in the flush matter following such clause includes items, services, supplies, and products that are payable under part B of subchapter XVIII as a drug or biological."Subsec. (b)(3)(A)(iii). Pub. L. 116-260, §401(c)(2), substituted "section 1395rr(b)(14)(B) of this title" for "section 1395rr(b)(13)(A)(ii) of this title" in concluding provisions.Subsec. (b)(3)(D). Pub. L. 116-260, §112(b)(5), (6), in concluding provisions, substituted "1395w-104(c)(2)(G) of this title" for "1395w-104(c)(2)(E) of this title" and inserted at end "Any information disclosed to the Executive Director of the Medicare Payment Advisory Commission or the Executive Director of the Medicaid and CHIP Payment and Access Commission pursuant to this subparagraph shall not be disclosed by either such Executive Director in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler. Such information also shall not be disclosed by either such Executive Director to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler." Pub. L. 116-260, §112(b)(1), substituted "subsection (a)(6)(A)" for "subsection (a)(6)(A)(ii)" in introductory provisions.Subsec. (b)(3)(D)(vii). Pub. L. 116-260, §112(b)(2)-(4), added cl. (vii).Subsec. (d)(7)(D). Pub. L. 116-159 added subpar. (D).2019-Subsec. (b)(1)(B). Pub. L. 116-16, §6(b)(2), inserted ",including amounts received by a State under subsection (c)(4)," after "in any quarter". Subsec. (b)(3). Pub. L. 116-16, §6(a)(1)(A), inserted "and drug product" after "price" in heading.Subsec. (b)(3)(A)(ii), (iii). Pub. L. 116-16, §6(a)(1)(B)(i), (ii), struck out "and" at end of cl. (ii) and substituted semicolon for period at end of cl. (iii). Subsec. (b)(3)(A)(v). Pub. L. 116-16, §6(a)(1)(B)(iii), (iv), added cl. (v).Subsec. (b)(3)(C)(ii). Pub. L. 116-16, §6(a)(1)(C)(i), (2) (B), inserted ",including information related to drug pricing, drug product information, and data related to drug pricing or drug product information," after "provides false information" and substituted "subsections (a), (b), (f)(3), and (f)(4)" for "subsections (a) and (b)".Subsec. (b)(3)(C)(iii), (iv). Pub. L. 116-16, §6(a)(1)(C)(ii), added cls. (iii) and (iv).Subsec. (b)(3)(D)(vi). Pub. L. 116-16, §6(a)(1)(C)(iii), added cl. (vi). Subsec. (c)(4). Pub. L. 116-16, §6(b)(1), added par. (4). Subsec. (k)(1)(C). Pub. L. 116-59, §1603(a), substituted "Exclusion" for "Inclusion" in heading and "the manufacturer's new drug application" for "a new drug application" and "exclusive" for "inclusive" in text. Subsec. (k)(2)(A). Pub. L. 116-16, §6(c)(1), substituted "paragraph (4)" for "paragraph (5)" in introductory provisions.Subsec. (k)(7)(A)(i). Pub. L. 116-16, §6(c)(2)(B), substituted ",including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4)," for "(not including any drug described in paragraph (5))".Subsec. (k)(7)(A)(ii). Pub. L. 116-16, §6(c)(2)(A), (C), substituted "is marketed" for "was originally marketed" and "a new drug application" for "an original new drug application" and inserted ",unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation))" before period at end. Subsec. (k)(7)(A)(iv). Pub. L. 116-16, §6(c)(2)(A), (D), substituted "a new drug application" for "an original new drug application" and inserted ",including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4)," after "covered outpatient drug", "unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation))" after "under the new drug application", and "Such term also includes a covered outpatient drug that is a biological product licensed, produced, or distributed under a biologics license application approved by the Food and Drug Administration." at end.Subsec. (k)(11). Pub. L. 116-59, §1603(b), struck out "manufacturers," before "repackers," and "manufacturer's and" before "distributor's warehouses,". 2018-Subsec. (c)(2)(C). Pub. L. 115-123 added cls. (i) to (iii) and struck out introductory provisions and former cls. (i) to (iii) which read as follows: "In the case of a drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the rebate obligation with respect to such drug under this section shall be the amount computed under this section for such new drug or, if greater, the product of-"(i) the average manufacturer price of the line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form;"(ii) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and"(iii) the total number of units of each dosage form and strength of the line extension product paid for under the State plan in the rebate period (as reported by the State)." Subsec. (g)(1)(A). Pub. L. 115-271, §1004(b)(1)(A), substituted "of section 1396a(a)(54)" for "of section 1396b(i)(10)(B)", struck out ",by not later than January 1, 1993," after "shall provide", and substituted "gross overuse, excessive utilization, inappropriate or medically unnecessary care, or prescribing or billing practices that indicate abuse or excessive utilization" for "gross overuse, or inappropriate or medically unnecessary care". Subsec. (g)(2)(B). Pub. L. 115-271, §1004(b)(1)(B), substituted "gross overuse, excessive utilization, inappropriate or medically unnecessary care, or prescribing or billing practices that indicate abuse or excessive utilization" for "gross overuse, or inappropriate or medically unnecessary care". 2016-Subsec. (c)(2)(C). Pub. L. 114-198 inserted before period at end of concluding provisions ",but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation".2015-Subsec. (c)(3)(A). Pub. L. 114-74, §602(a)(1), substituted "Except as provided in subparagraph (C), the amount" for "The amount".Subsec. (c)(3)(C). Pub. L. 114-74, §602(a)(2), added subpar. (C). 2010-Subsec. (a)(5)(B). Pub. L. 111-309 substituted a period for "and a children's hospital described in section 1395ww(d)(1)(B)(iii) of this title which meets the requirements of clauses (i) and (iii) of section 256b(b)(4)(L) of this title and which would meet the requirements of clause (ii) of such section if that clause were applied by taking into account the percentage of care provided by the hospital to patients eligible for medical assistance under a State plan under this subchapter."Subsec. (b)(1)(A). Pub. L. 111-148, §2501(c)(2)(A)(i), inserted ",including such drugs dispensed to individuals enrolled with a medicaid managed care organization if the organization is responsible for coverage of such drugs" after "for such period". Subsec. (b)(1)(C). Pub. L. 111-148, §2501(a)(2), added subpar. (C). Subsec. (b)(2)(A). Pub. L. 111-148, §2501(c)(2)(A)(ii), inserted "including such information reported by each medicaid managed care organization," after "for which payment was made under the plan during the period,".Subsec. (b)(3)(A). Pub. L. 111-148, §2503(b)(1)(B), which directed insertion, in the second sentence, of "(relating to the weighted average of the most recently reported monthly average manufacturer prices)" after "(D)(v)" was executed by making the insertion in concluding provisions to reflect the probable intent of Congress.Subsec. (b)(3)(A)(iv). Pub. L. 111-148, §2503(b)(1)(A), which directed, in the first sentence, addition of cl. (iv) after cl. (iii), was executed by adding cl. (iv) after cl. (iii) to reflect the probable intent of Congress. Subsec. (b)(3)(D)(v). Pub. L. 111-148, §2503(b)(2), substituted "the weighted average of the most recently reported monthly average manufacturer prices and the average retail survey price determined for each multiple source drug in accordance with subsection (f)" for "average manufacturer prices". Subsec. (c)(1)(B)(i)(IV) to (VI). Pub. L. 111-148, §2501(a)(1)(A), struck out "and" at end of subcl. (IV), inserted "and before January 1, 2010" after "December 31, 1995," and substituted ";and" for period at end in subcl. (V), and added subcl. (VI).Subsec. (c)(1)(B)(iii). Pub. L. 111-148, §2501(a)(1)(B), added cl. (iii). Subsec. (c)(1)(C)(i)(VI). Pub. L. 111-148, §3301(d)(2), inserted ",or any discounts provided by manufacturers under the Medicare coverage gap discount program under section 1395w-114a of this title" before period at end. Subsec. (c)(2)(C). Pub. L. 111-152, §1206(a), amended subpar. (C) generally. Prior to amendment, text read as follows: "(i) IN GENERAL.-Except as provided in clause (ii), in the case of a drug that is a new formulation, such as an extended-release formulation, of a single source drug or an innovator multiple source drug, the rebate obligation with respect to the drug under this section shall be the amount computed under this section for the new formulation of the drug or, if greater, the product of- "(I) the average manufacturer price for each dosage form and strength of the new formulation of the single source drug or innovator multiple source drug;"(II) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and"(III) the total number of units of each dosage form and strength of the new formulation paid for under the State plan in the rebate period (as reported by the State)."(ii) NO APPLICATION TO NEW FORMULATIONS OF ORPHAN DRUGS.-Clause (i) shall not apply to a new formulation of a covered outpatient drug that is or has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, without regard to whether the period of market exclusivity for the drug under section 527 of such Act has expired or the specific indication for use of the drug." Pub. L. 111-148, §2501(d)(1), added subpar. (C).Subsec. (c)(2)(D). Pub. L. 111-148, §2501(e), added subpar. (D).Subsec. (c)(3)(B). Pub. L. 111-148, §2501(b), struck out "and" at end of cl. (i), inserted "and before January 1, 2010," after "December 31, 1993," and substituted ";and" for period at end in cl. (ii), and added cl. (iii).Subsec. (d)(2)(E). Pub. L. 111-148, §2502(a)(1), redesignated subpar. (F) as (E) and struck out former subpar. (E) which read as follows: "Agents when used to promote smoking cessation." Subsec. (d)(2)(F). Pub. L. 111-148, §4107(b), inserted ",except, in the case of pregnant women when recommended in accordance with the Guideline referred to in section 1396d(bb)(2)(A) of this title, agents approved by the Food and Drug Administration under the over-the-counter monograph process for purposes of promoting, and when used to promote, tobacco cessation" before period at end. Pub. L. 111-148, §2502(a)(1)(B), redesignated subpar. (G) as (F). Former subpar. (F) redesignated (E).Subsec. (d)(2)(G) to (K). Pub. L. 111-148, §2502(a)(1), redesignated subpars. (H) and (K) as (G) and (H), respectively, and struck out subpars. (I) and (J) which read as follows: "(I) Barbiturates."(J) Benzodiazepines." Subsec. (d)(7). Pub. L. 111-148, §2502(a)(2), added par. (7).Subsec. (e)(4). Pub. L. 111-148, §2503(a)(1)(A), struck out "(or, effective January 1, 2007, two or more)" after "three or more".Subsec. (e)(5). Pub. L. 111-148, §2503(a)(1)(B), added par. (5) and struck out former par. (5). Prior to amendment, text read as follows: "Effective January 1, 2007, in applying the Federal upper reimbursement limit under paragraph (4) and section 447.332(b) of title 42 of the Code of Federal Regulations, the Secretary shall substitute 250 percent of the average manufacturer price (as computed without regard to customary prompt pay discounts extended to wholesalers) for 150 percent of the published price."Subsec. (f)(1)(A)(i). Pub. L. 111-148, §2503(c)(1), inserted "with respect to a retail community pharmacy," before "the determination".Subsec. (f)(1)(C)(ii). Pub. L. 111-148, §2503(c)(2), substituted "retail community pharmacies" for "retail pharmacies".Subsec. (j)(1). Pub. L. 111-148, §2501(c)(2)(B), added par. (1) and struck out former par. (1) which read as follows: "Covered outpatient drugs dispensed by health maintenance organizations, including medicaid managed care organizations that contract under section 1396b(m) of this title, are not subject to the requirements of this section." Subsec. (k)(1)(A). Pub. L. 111-148, §2503(a)(2)(A), substituted "by-" for "by wholesalers for drugs distributed to the retail pharmacy class of trade." and added cls. (i) and (ii).Subsec. (k)(1)(B). Pub. L. 111-148, §2503(a)(2)(B), added subpar. (B) and struck out former subpar. (B). Prior to amendment, text read as follows: "The average manufacturer price for a covered outpatient drug shall be determined without regard to customary prompt pay discounts extended to wholesalers."Subsec. (k)(1)(B)(i)(IV). Pub. L. 111-226 inserted at end ",unless the drug is an inhalation, infusion, instilled, implanted, or injectable drug that is not generally dispensed through a retail community pharmacy; and". Subsec. (k)(1)(B)(i)(V). Pub. L. 111-152, §1101(c), added subcl. (V).Subsec. (k)(1)(C). Pub. L. 111-148, §2503(a)(2)(C), substituted "retail community pharmacies" for "the retail pharmacy class of trade".Subsec. (k)(7)(A)(i)(III). Pub. L. 111-148, §2503(a)(3)(A), substituted "the United States" for "the State". Subsec. (k)(7)(C). Pub. L. 111-148, §2503(a)(3)(B), inserted "and" after semicolon at end of cl. (i), substituted period for ";and" at end of cl. (ii), and struck out cl. (iii) which read as follows: "a drug product is considered to be sold or marketed in a State if it appears in a published national listing of average wholesale prices selected by the Secretary, provided that the listed product is generally available to the public through retail pharmacies in that State."Subsec. (k)(10), (11). Pub. L. 111-148, §2503(a)(4), added pars. (10) and (11). 2009-Subsec. (c)(1)(D)(i)(IV) to (VI). Pub. L. 111-8, §221(a)(1), added subcls. (IV) and (V) and redesignated former subcl. (IV) as (VI).Subsec. (c)(1)(D)(iv). Pub. L. 111-8, §221(a)(2), added cl. (iv). 2006-Subsec. (a)(5)(B). Pub. L. 109-171, §6004(a), inserted before period at end "and a children's hospital described in section 1395ww(d)(1)(B)(iii) of this title which meets the requirements of clauses (i) and (iii) of section 256b(b)(4)(L) of this title and which would meet the requirements of clause (ii) of such section if that clause were applied by taking into account the percentage of care provided by the hospital to patients eligible for medical assistance under a State plan under this subchapter".Subsec. (a)(7). Pub. L. 109-171, §6002(a), added par. (7).Subsec. (b)(3)(A). Pub. L. 109-171, §6001(b)(1)(B), inserted "Beginning July 1, 2006, the Secretary shall provide on a monthly basis to States under subparagraph (D)(iv) the most recently reported average manufacturer prices for single source drugs and for multiple source drugs and shall, on at least a quarterly basis, update the information posted on the website under subparagraph (D)(v)." at end of concluding provisions.Subsec. (b)(3)(A)(i). Pub. L. 109-171, §6003(a)(1), added cl. (i) and struck out former cl. (i) which read as follows: "not later than 30 days after the last day of each month of a rebate period under the agreement (beginning on or after January 1, 1991), on the average manufacturer price (as defined in subsection (k)(1) of this section), customary prompt pay discounts extended to wholesalers, and, (for single source drugs and innovator multiple source drugs), the manufacturer's best price (as defined in subsection (c)(2)(B) of this section) for covered outpatient drugs for the rebate period under the agreement,;". Pub. L. 109-171, §6001(b)(1)(A), (c) (2), inserted "month of a" after "last day of each" and ",customary prompt pay discounts extended to wholesalers," after "(k)(1) of this section)".Subsec. (b)(3)(A)(ii). Pub. L. 109-171, §6003(a)(2), inserted "(including for such drugs that are sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act)" after "drugs".Subsec. (b)(3)(A)(iii). Pub. L. 109-171, §6001(d)(1), inserted ",and, for calendar quarters beginning on or after January 1, 2007 and only with respect to the information described in subclause (III), for covered outpatient drugs" before period at end. Subsec. (b)(3)(D)(iv), (v). Pub. L. 109-171, §6001(b)(2), added cls. (iv) and (v).Subsec. (c)(1)(C)(i). Pub. L. 109-171, §6003(b)(1)(A), inserted "(including the lowest price available to any entity for any such drug of a manufacturer that is sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act)" after "or innovator multiple source drug of a manufacturer" in introductory provisions.Subsec. (c)(1)(C)(ii)(IV). Pub. L. 109-171, §6003(b)(1)(B), added subcl. (IV).Subsec. (c)(1)(D). Pub. L. 109-171, §6001(d)(2), added subpar. (D).Subsec. (e)(4). Pub. L. 109-171, §6001(a)(1), which directed substitution of "Subject to paragraph (5), the Secretary" for "The Secretary" and insertion of "(or, effective January 1, 2007, two or more)" after "three or more" in subsec. (e)(4), was executed to the last par. of subsec. (e) to reflect the probable intent of Congress. See 1993 Amendment note below.Subsec. (e)(5). Pub. L. 109-171, §6001(a)(2), added par. (5).Subsec. (f). Pub. L. 109-171, §6001(e), added subsec. (f).Subsec. (g)(1)(B)(i)(II). Pub. L. 109-171, §6001(f)(1), which directed insertion of "(or its successor publications)" after "United States Pharmacopoeia-Drug Information", was executed by making insertion after "United States Pharmacopeia-Drug Information" to reflect the probable intent of Congress.Subsec. (g)(2)(A)(ii). Pub. L. 109-171, §6001(f)(2), inserted ",or to require verification of the offer to provide consultation or a refusal of such offer" before period at end of concluding provisions.Subsec. (k)(1). Pub. L. 109-171, §6001(c)(1), designated existing provisions as subpar. (A), inserted heading, substituted "Subject to subparagraph (B), the term" for "The term", struck out ",after deducting customary prompt pay discounts" before period at end, and added subpar. (B).Subsec. (k)(1)(C). Pub. L. 109-171, §6003(b)(2), as amended by Pub. L. 109-432 added subpar. (C).Subsec. (k)(7)(A)(i). Pub. L. 109-171, §6001(a)(4), substituted "is" for "are" in subcls. (I), (II), and (III). Pub. L. 109-171, §6001(a)(3), substituted "at least 1 other drug product" for "are 2 or more drug products" in introductory provisions.2005-Subsec. (d)(2)(K). Pub. L. 109-91 added subpar. (K). 2003-Subsec. (a)(1). Pub. L. 108-173, §303(i)(4)(A), inserted "or under part B of subchapter XVIII" after "section 1396b(a) of this title".Subsec. (b)(3)(A). Pub. L. 108-173, §303(i)(4)(B), added cl. (iii) and concluding provisions.Subsec. (b)(3)(B). Pub. L. 108-173, §303(i)(4)(C), inserted "and manufacturer's average sales price" after "average manufacturer price" in heading and "and manufacturer's average sales prices (including wholesale acquisition cost) if required to make payment" after "manufacturer prices" in text.Subsec. (b)(3)(D). Pub. L. 108-173, §303(i)(4)(D)(i), inserted "(other than the wholesale acquisition cost for purposes of carrying out section 1395w-3a of this title)" after "subsection (a)(6)(A)(ii)" in introductory provisions. Pub. L. 108-173, §105(b), which directed insertion of "and drug pricing data reported under the first sentence of section 1395w-141(i)(1) of this title" after "section 1395w-104(c)(2)(E) of this title" in last sentence, was executed by making the insertion after "or 1395w-104(c)(2)(E) of this title" in concluding provisions to reflect the probable intent of Congress. Pub. L. 108-173, §101(e)(4), inserted concluding provisions.Subsec. (b)(3)(D)(i). Pub. L. 108-173, §303(i)(4)(D)(ii), inserted ",to carry out section 1395w-3a of this title (including the determination and implementation of the payment amount), or to carry out section 1395w-3b of this title" after "this section". Subsec. (c)(1)(C)(i)(I). Pub. L. 108-173, §1002(a), inserted "(including inpatient prices charged to hospitals described in section 256b(a)(4)(L) of this title)" before semicolon at end. Subsec. (c)(1)(C)(i)(V), (VI). Pub. L. 108-173, §103(e)(1), added subcls. (V) and (VI).Subsec. (c)(1)(C)(iii). Pub. L. 108-173, §1002(b), added cl. (iii). Subsec. (e)[(4)]. Pub. L. 108-173, §900(e)(1)(K), (L), which directed substitution of "The Secretary" for "HCFA" in subsecs. (e)(4) and (f)(2), was executed to the last par. of subsec. (e) to reflect the probable intent of Congress. See 1993 Amendment note below.Subsec. (g)(1)(B)(i)(II). Pub. L. 108-173, §101(e)(9)(A), inserted "and" at end.Subsec. (g)(1)(B)(i)(IV). Pub. L. 108-173, §101(e)(9)(B), struck out subcl. (IV) which read as follows: "American Medical Association Drug Evaluations; and". 1999-Subsec. (a)(1). Pub. L. 106-113, §1000(a)(6) [title VI, §606(a)], substituted "shall become effective as of the date on which the agreement is entered into or, at State option, on any date thereafter on or before" for "shall not be effective until". Subsec. (g)(2)(A)(ii)(II)(cc). Pub. L. 106-113, §1000(a)(6) [title VI, §608(u)(1)], substituted "individual's" for "individuals". Subsec. (i)(1). Pub. L. 106-113, §1000(a)(6) [title VI, §608(u)(2)], substituted "the operation of this section" for "the the operation of this section".Subsec. (k)(7)(A)(iv). Pub. L. 106-113, §1000(a)(6) [title VI, §608(u)(3)(A)], substituted "distributors" for "distributers".Subsec. (k)(7)(C)(i). Pub. L. 106-113, §1000(a)(6) [title VI, §608(u)(3)(B)], substituted "pharmaceutically" for "pharmaceuutically". 1997-Subsec. (g)(1)(B)(i)(III), (IV). Pub. L. 105-33, §4756, added subcl. (III) and redesignated former subcl. (III) as (IV).Subsec. (j)(1). Pub. L. 105-33, §4701(b)(2)(A)(x), substituted "health maintenance organizations, including medicaid managed care organizations" for "*** Health Maintenance Organizations, including those organizations". 1993-Subsec. (b)(1)(A). Pub. L. 103-66, §13602(a)(2)(A)(i)(II), which directed amendment of subpar. (A) by substituting "dispensed after December 31, 1990, for which payment was made under the State plan for such period" for "dispensed under the plan during the quarter (or other period as the Secretary may specify)", was executed by making the substitution for "dispensed under the plan during the quarter (or such other period as the Secretary may specify)" to reflect the probable intent of Congress. Pub. L. 103-66, §13602(a)(2)(A)(i)(I), substituted "for a rebate period" for "each calendar quarter (or periodically in accordance with a schedule specified by the Secretary)".Subsec. (b)(2)(A). Pub. L. 103-66, §13602(a)(2)(A)(ii), substituted "each rebate period" for "each calendar quarter" and "units of each dosage form and strength and package size" for "dosage units", inserted "after December 31, 1990, for which payment was made" after "dispensed", and substituted "during the period" for "during the quarter".Subsec. (b)(3)(A)(i). Pub. L. 103-66, §13602(a)(2)(A)(iii), substituted "rebate period under the agreement" for "quarter" in two places.Subsec. (c). Pub. L. 103-66, §13602(a)(1), added subsec. (c) and struck out former subsec. (c) which related to determination of amount of rebate for certain drugs. Pub. L. 103-18 substituted "such drug, except that for the calendar quarter beginning after September 30, 1992, and before January 1, 1993, the amount of the rebate may not exceed 50 percent of such average manufacturer price;" for "such drug;" in par. (1)(B)(ii)(II).Subsecs. (d) to (f). Pub. L. 103-66, §13602(a)(1), added subsecs. (d) and (e), struck out former subsecs. (d) consisting of pars. (1) to (8) relating to limitations on coverage of drugs, (e) relating to denial of Federal financial participation in certain cases, and (f)(1) relating to reductions in pharmacy reimbursement limits, and struck out par. designation for former par. (2) of subsec. (f) without supplying a new designation. The text of former subsec. (f)(2) is now the last par. of subsec. (e).Subsec. (k)(1). Pub. L. 103-66, §13602(a)(2)(B)(i), substituted "rebate period" for "calendar quarter" and inserted before period at end ",after deducting customary prompt pay discounts".Subsec. (k)(3). Pub. L. 103-66, §13602(a)(2)(B)(ii)(III), in concluding provisions, substituted "for which a National Drug Code number is not required by the Food and Drug Administration or a drug or biological used" for "which is used" and inserted at end "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."Subsec. (k)(3)(E). Pub. L. 103-66, §13602(a)(2)(B)(ii)(I), struck out "****emergency room visits" after "services". Subsec. (k)(3)(F). Pub. L. 103-66, §13602(a)(2)(B)(ii)(II), which directed amendment of subpar. (F) by substituting "services and services provided by an intermediate care facility for the mentally retarded" for "services", was executed by making the substitution for "sevices" to reflect the probable intent of Congress because the word "services" did not appear.Subsec. (k)(6). Pub. L. 103-66, §13602(a)(2)(B)(iii), substituted "or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(i)." for ",which appears in peer-reviewed medical literature or which is accepted by one or more of the following compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluations, and the United States Pharmacopeia-Drug Information."Subsec. (k)(7)(A)(i). Pub. L. 103-66, §13602(a)(2)(B)(iv), substituted "rebate period" for "calendar quarter" in introductory provisions.Subsec. (k)(8), (9). Pub. L. 103-66, §13602(a)(2)(B)(v), added par. (8) and redesignated former par. (8) as (9).1992-Subsec. (a)(1). Pub. L. 102-585, §601(b)(1), substituted "manufacturer), and must meet the requirements of paragraph (5) (with respect to drugs purchased by a covered entity on or after the first day of the first month that begins after November 4, 1992) and paragraph (6)" for "manufacturer)".Subsec. (a)(5), (6). Pub. L. 102-585, §601(b)(2), added pars. (5) and (6).Subsec. (b)(3)(D). Pub. L. 102-585, §601(b)(3), substituted "this paragraph or under an agreement with the Secretary of Veterans Affairs described in subsection (a)(6)(A)(ii)" for "this paragraph", "Secretary or the Secretary of Veterans Affairs" for "Secretary", and "except-" and cls. (i) to (iii) for "except as the Secretary determines to be necessary to carry out this section and to permit the Comptroller General to review the information provided." Subsec. (b)(4)(B)(ii). Pub. L. 102-585, §601(b)(4)(i), (ii), substituted "the calendar quarter beginning at least 60 days" for "such period" and "the manufacturer provides notice to the Secretary." for "of the notice as the Secretary may provide (but not beyond the term of the agreement)."Subsec. (b)(4)(B)(iv), (v). Pub. L. 102-585, §601(b)(4)(iii), added cls. (iv) and (v). Subsec. (c)(1)(B)(i). Pub. L. 102-585, §601(c)(1), which directed the substitution of "October 1, 1992," for "January 1, 1993,", was executed by making the substitution in introductory provisions and in subcl. (II), to reflect the probable intent of Congress.Subsec. (c)(1)(B)(ii) to (v). Pub. L. 102-585, §601(c)(2), (3), added cls. (ii) to (v) and struck out former cl. (ii) which read as follows: "for quarters (or other periods) beginning after December 31, 1992, the greater of- "(I) the difference between the average manufacturer price for a drug and 85 percent of such price, or"(II) the difference between the average manufacturer price for a drug and the best price (as defined in paragraph (2)(B)) for such quarter (or period) for such drug." Subsec. (c)(1)(C). Pub. L. 102-585, §601(a), substituted "(excluding any prices charged on or after October 1, 1992, to the Indian Health Service, the Department of Veterans Affairs, a State home receiving funds under section 1741 of title 38, the Department of Defense, the Public Health Service, or a covered entity described in subsection (a)(5)(B) of this section, any prices charged under the Federal Supply Schedule of the General Services Administration, or any prices used under a State pharmaceutical assistance program, and excluding" for "(excluding".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2020 AMENDMENT Amendment made by Pub. L. 116-159 effective as if included in the enactment of section 1006(b) of the SUPPORT for Patients and Communities Act (Public Law 115-271; 132 Stat. 3914), see section 2601(c) of Pub. L. 116-159 set out as a note under section 1396d of this title.
EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116-59, div. B, title VI, §1603(c), Sept. 27, 2019, 133 Stat. 1108, provided that: "The amendments made by this section [amending this section] shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this Act [Sept. 27, 2019]." Amendment by Pub. L. 116-16 effective on Apr. 18, 2019, and applicable to covered outpatient drugs supplied by manufacturers under agreements under this section on or after that date, see section 6(e) of Pub. L. 116-16 set out as a note under section 1320a-7 of this title.
EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115-271, title I, §1004(b)(2), Oct. 24, 2018, 132 Stat. 3912, provided that: "The amendments made by paragraph (1) [amending this section] shall take effect with respect to retrospective drug use reviews conducted on or after October 1, 2020." Pub. L. 115-123, div. E, title XII, §53104(b), Feb. 9, 2018, 132 Stat. 302, provided that: "The amendments made [by] subsection (a) [amending this section] shall apply with respect to rebate periods beginning on or after October 1, 2018."
EFFECTIVE DATE OF 2016 AMENDMENT Pub. L. 114-198, title VII, §705(b), July 22, 2016, 130 Stat. 753, provided that: "The amendment made by subsection (a) [amending this section] shall apply to drugs that are paid for by a State in calendar quarters beginning on or after the date of the enactment of this Act [July 22, 2016]."
EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114-74, title VI, §602(b), Nov. 2, 2015, 129 Stat. 597, provided that: "The amendments made by subsection (a) [amending this section] shall apply to rebate periods beginning after the date that is one year after the date of the enactment of this Act [Nov. 2, 2015]."
EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111-226, title II, §202, Aug. 10, 2010, 124 Stat. 2394, provided that the amendment made by Pub. L. 111-226 is effective as if included in the enactment of Pub. L. 111-148. Pub. L. 111-152, title I, §1206(b), Mar. 30, 2010, 124 Stat. 1057, provided that: "The amendment made by subsection (a) [amending this section] shall take effect as if included in the enactment of the Patient Protection and Affordable Care Act [Pub. L. 111-148]." Pub. L. 111-148, title II, §2501(d)(2), Mar. 23, 2010, 124 Stat. 309, provided that: "The amendment made by paragraph (1) [amending this section] shall apply to drugs that are paid for by a State after December 31, 2009." Pub. L. 111-148, title II, §2502(b), Mar. 23, 2010, 124 Stat. 310, provided that: "The amendments made by this section [amending this section] shall apply to services furnished on or after January 1, 2014." Pub. L. 111-148, title II, §2503(d), Mar. 23, 2010, 124 Stat. 312, provided that: "The amendments made by this section [amending this section] shall take effect on the first day of the first calendar year quarter that begins at least 180 days after the date of enactment of this Act [Mar. 23, 2010], without regard to whether or not final regulations to carry out such amendments have been promulgated by such date." Amendment by section 3301(d)(2) of Pub. L. 111-148 applicable to drugs dispensed on or after July 1, 2010, see section 3301(d)(3) of Pub. L. 111-148 set out as a note under section 1320a-7b of this title. Amendment by section 4107(b) of Pub. L. 111-148 effective Oct. 1, 2010, see section 4107(d) of Pub. L. 111-148 set out as a note under section 1396d of this title.
EFFECTIVE DATE OF 2009 AMENDMENT Pub. L. 111-8, div. F, title II, §221(b), Mar. 11, 2009, 123 Stat. 783, provided that: "The amendments made by this subsection [probably means this section, amending this section] shall take effect as if included in the amendment made by section 6001(d)(2) of the Deficit Reduction Act of 2005 [Pub. L. 109-171]."
EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109-432, div. B, title IV, §405(c)(2)(A), Dec. 20, 2006, 120 Stat. 2999, provided that the amendment made by section 405(c)(2)(A) is effective as if included in the enactment of the Deficit Reduction Act of 2005 (Public Law 109-171). Pub. L. 109-171, title VI, §6001(f)(3), Feb. 8, 2006, 120 Stat. 58, provided that: "The amendments made by this subsection [amending this section and section 1395x of this title] shall take effect on the date of the enactment of this Act [Feb. 8, 2006]." Pub. L. 109-171, title VI, §6001(g), Feb. 8, 2006, 120 Stat. 58, provided that: "Except as otherwise provided, the amendments made by this section [amending this section and section 1395x of this title] shall take effect on January 1, 2007, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date." Pub. L. 109-171, title VI, §6003(c), Feb. 8, 2006, 120 Stat. 61, provided that: "The amendments made by this section [amending this section] take effect on January 1, 2007." Pub. L. 109-171, title VI, §6004(b), Feb. 8, 2006, 120 Stat. 61, provided that: "The amendment made by subsection (a) [amending this section] shall apply to drugs purchased on or after the date of the enactment of this Act [Feb. 8, 2006]."
EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109-91 applicable to drugs dispensed on or after Jan. 1, 2006, see section 104(d) of Pub. L. 109-91 set out as a note under section 1396b of this title.
EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108-173, title I, §103(e)(2), Dec. 8, 2003, 117 Stat. 2160, provided that: "Section 1927(c)(1)(C)(i)(VI) of the Social Security Act [42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)], as added by paragraph (1), shall apply to prices charged for drugs dispensed on or after January 1, 2006."
EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106-113, div. B, §1000(a)(6) [title VI, §606(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A-396, provided that: "The amendment made by subsection (a) [amending this section] applies to agreements entered into on or after the date of enactment of this Act [Nov. 29, 1999]." Amendment by section 1000(a)(6) [title VI, §608(u)] of Pub. L. 106-113 effective Nov. 29, 1999, see section 1000(a)(6) [title VI, §608(bb)] of Pub. L. 106-113 set out as a note under section 1396a of this title.
EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105-33 effective Aug. 5, 1997, and applicable to contracts entered into or renewed on or after Oct. 1, 1997, see section 4710 of Pub. L. 105-33 set out as a note under section 1396b of this title.
EFFECTIVE DATE OF 1993 AMENDMENT Pub. L. 103-66, title XIII, §13602(d), Aug. 10, 1993, 107 Stat. 619, provided that:"(1) Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1396a and 1396b of this title] shall take effect as if included in the enactment of OBRA-1990 [Pub. L. 101-508]."(2) The amendment made by subsection (a)(1) [amending this section] (insofar as such subsection amends section 1927(d) of the Social Security Act [42 U.S.C. 1396r-8(d)] ) and the amendment made by subsection (c) [amending section 1396a of this title] shall apply to calendar quarters beginning on or after October 1, 1993, without regard to whether or not regulations to carry out such amendments have been promulgated by such date." Pub. L. 103-18, §2(b), Apr. 12, 1993, 107 Stat. 54, provided that: "The amendment made by subsection (a) [amending this section] shall take effect as if included in the enactment of section 601(c) of the Veterans Health Care Act of 1992 [Pub. L. 102-585]."
EFFECTIVE DATE OF 1992 AMENDMENT Pub. L. 102-585, title VI, §601(e), Nov. 4, 1992, 106 Stat. 4966, provided that: "The amendments made by this section [amending this section] shall apply with respect to payments to State plans under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.] for calendar quarters (or periods) beginning on or after January 1, 1993 (without regard to whether or not regulations to carry out such amendments have been promulgated by such date)."
REGULATIONS Pub. L. 109-171, title VI, §6001(c)(3), Feb. 8, 2006, 120 Stat. 55, provided that: "(A) INSPECTOR GENERAL RECOMMENDATIONS.-Not later than June 1, 2006, the Inspector General of the Department of Health and Human Services shall- "(i) review the requirements for, and manner in which, average manufacturer prices are determined under section 1927 of the Social Security Act [42 U.S.C. 1396r-8], as amended by this section; and "(ii) shall submit to the Secretary of Health and Human Services and Congress such recommendations for changes in such requirements or manner as the Inspector General determines to be appropriate. "(B) DEADLINE FOR PROMULGATION.-Not later than July 1, 2007, the Secretary of Health and Human Services shall promulgate a regulation that clarifies the requirements for, and manner in which, average manufacturer prices are determined under section 1927 of the Social Security Act, taking into consideration the recommendations submitted to the Secretary in accordance with subparagraph (A)(ii)."
INCLUSION IN THE MEDICAID DRUG REBATE PROGRAM OF COVERED OUTPATIENT DRUGS USED FOR COVID-19 TREATMENT Pub. L. 117-2, title IX, §9811(a)(4)(A), Mar. 11, 2021, 135 Stat. 210, provided that:"(A) IN GENERAL.-The requirements of section 1927 of the Social Security Act (42 U.S.C. 1396r-8) shall apply to any drug or biological product to which subparagraph (F) of section 1905(a)(4) of such Act [42 U.S.C. 1396d(a)(4)], as added by paragraph (1), applies or to which the subclause (XVIII) in the matter following subparagraph (G) of section 1902(a)(10) of such Act [42 U.S.C. 1396a(a)(10)], as added by paragraph (2), applies that is-"(i) furnished as medical assistance in accordance with section 1902(a)(10)(A) of such Act and such subparagraph (F) [probably means 42 U.S.C. 1396d(a)(4)(F)] or subclause (XVIII) [probably means subcl. (XVIII) in 42 U.S.C. 1396a(a)(10) concluding provisions] and section 1902(a)(10)(A) of such Act, as applicable, for the treatment, or prevention, of COVID-19, as described in such subparagraph or subclause, respectively; and"(ii) a covered outpatient drug (as defined in section 1927(k) of such Act, except that, in applying paragraph (2)(A) of such section [probably means 42 U.S.C. 1396r-8(k)(2)(A)] to a drug to which such subparagraph (F) [probably means 42 U.S.C. 1396d(a)(4)(F)] or such subclause (XVIII) [probably means subcl. (XVIII) in 42 U.S.C. 1396a(a)(10) concluding provisions] applies, such drug shall be deemed a prescribed drug for purposes of section 1905(a)(12) of such Act)."
PHARMACY REIMBURSEMENT UNDER MEDICAID Pub. L. 110-275, title II, §203, July 15, 2008, 122 Stat. 2592, provided that:"(a) DELAY IN APPLICATION OF NEW PAYMENT LIMIT FOR MULTIPLE SOURCE DRUGS UNDER MEDICAID.-Notwithstanding paragraphs (4) and (5) of subsection (e) of section 1927 of the Social Security Act (42 U.S.C. 1396r-8) or part 447 of title 42, Code of Federal Regulations, as published on July 17, 2007 (72 Federal Register 39142)-"(1) the specific upper limit under section 447.332 of title 42, Code of Federal Regulations (as in effect on December 31, 2006) applicable to payments made by a State for multiple source drugs under a State Medicaid plan shall continue to apply through September 30, 2009, for purposes of the availability of Federal financial participation for such payments; and"(2) the Secretary of Health and Human Services shall not, prior to October 1, 2009, finalize, implement, enforce, or otherwise take any action (through promulgation of regulation, issuance of regulatory guidance, use of Federal payment audit procedures, or other administrative action, policy, or practice, including a Medical Assistance Manual transmittal or letter to State Medicaid directors) to impose the specific upper limit established under section 447.514(b) of title 42, Code of Federal Regulations as published on July 17, 2007 (72 Federal Register 39142). "(b) TEMPORARY SUSPENSION OF UPDATED PUBLICLY AVAILABLE AMP DATA.-Notwithstanding clause (v) of section 1927(b)(3)(D) of the Social Security Act (42 U.S.C. 1396r-8(b)(3)(D)), the Secretary of Health and Human Services shall not, prior to October 1, 2009, make publicly available any AMP disclosed to the Secretary. "(c) DEFINITIONS.-In this subsection:"(1) The term 'multiple source drug' has the meaning given that term in section 1927(k)(7)(A)(i) of the Social Security Act (42 U.S.C. 1396r-8(k)(7)(A)(i))."(2) The term 'AMP' has the meaning given 'average manufacturer price' in section 1927(k)(1) of the Social Security Act (42 U.S.C. 1396r-8(k)(1)) and 'AMP' in section 447.504(a) of title 42, Code of Federal Regulations as published on July 17, 2007 (72 Federal Register 39142)."
APPLICATION OF 2003 AMENDMENT TO PHYSICIAN SPECIALTIESAmendment by section 303 of Pub. L. 108-173 insofar as applicable to payments for drugs or biologicals and drug administration services furnished by physicians, is applicable only to physicians in the specialties of hematology, hematology/oncology, and medical oncology under subchapter XVIII of this chapter, see section 303(j) of Pub. L. 108-173 set out as a note under section 1395u of this title. Notwithstanding section 303(j) of Pub. L. 108-173 (see note above), amendment by section 303 of Pub. L. 108-173 also applicable to payments for drugs or biologicals and drug administration services furnished by physicians in specialties other than the specialties of hematology, hematology/oncology, and medical oncology, see section 304 of Pub. L. 108-173 set out as a note under section 1395u of this title.
REPORTS ON BEST PRICE CHANGES AND PAYMENT OF REBATES Pub. L. 102-585, title VI, §601(d), Nov. 4, 1992, 106 Stat. 4965, provided that not later than 90 days after the expiration of each calendar quarter beginning on or after Oct. 1, 1992, and ending on or before Dec. 31, 1995, Secretary of Health and Human Services was to submit to Congress a report containing information as to percentage of single source drugs whose best price either increased, decreased, or stayed the same in comparison to best price during previous calendar quarter, median and mean percentage increase or decrease of such price, and, with respect to drugs for which manufacturers were required to pay rebates under subsec. (c) of this section, Secretary's best estimate, on State-by-State and national aggregate basis, of total amount of rebates paid under subsec. (c) of this section and percentages of such total amounts attributable to rebates paid under pars. (1) to (3) of subsec. (c) of this section, limited consideration to drugs which are considered significant expenditures under medicaid program, and contained requirements for initial report.
DEMONSTRATION PROJECTS TO EVALUATE EFFICIENCY AND COST-EFFECTIVENESS OF PROSPECTIVE DRUG UTILIZATION REVIEW Pub. L. 101-508, title IV, §4401(c), Nov. 5, 1990, 104 Stat. 1388-159, directed Secretary of Health and Human Services to establish statewide demonstration projects to evaluate efficiency and cost-effectiveness of prospective drug utilization review and to evaluate impact on quality of care and cost-effectiveness of paying pharmacists under this subchapter whether or not drugs were dispensed for drug use review services, with two reports to be submitted to Congress, the first not later than Jan. 1, 1994, and the second not later than Jan. 1, 1995.
STUDY OF DRUG PURCHASING AND BILLING PRACTICES IN HEALTH CARE INDUSTRY; REPORT Pub. L. 101-508, title IV, §4401(d), Nov. 5, 1990, 104 Stat. 1388-160, as amended by Pub. L. 104-316, title I, §122(i), Oct. 19, 1996, 110 Stat. 3837, provided for various studies and reports as follows: (1) directed Comptroller General to conduct study of drug purchasing and billing activities of various health care systems, and to submit report to Secretary of Health and Human Services and to Congress by not later than May 1, 1991; (2) directed Comptroller General to submit to Secretary and Congress report on changes in prices charged by manufacturers for prescription drugs to Department of Veterans Affairs, other Federal programs, hospital pharmacies, and other purchasing groups and managed care plans; (3) directed Secretary, acting in consultation with Comptroller General, to study prior approval procedures utilized by State medical assistance programs conducted under this subchapter, and to submit report to Congress by not later than Dec. 31, 1991; (4) directed Secretary to conduct study on adequacy of current reimbursement rates to pharmacists under each State medical assistance program conducted under this subchapter, and to submit report to Congress by not later than Dec. 31, 1991; and (5) directed Secretary to undertake study of relationship between State medical assistance plans and Federal and State acquisition and reimbursement policies for vaccines and accessibility of vaccinations and immunization to children, and to report to Congress not later than one year after Nov. 5, 1990.
- 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.
- person
- The term "person" means an individual, a trust or estate, a partnership, or a corporation.
- practices
- The term "practices" means design, financing, permitting, construction, commissioning, operation and maintenance, and other practices that contribute to achieving zero-net-energy buildings or facilities.