Eposit of Rebates Into Medicare Pre Scription Drug Account: F:/P11/NHI/TRICOMM/AAHCA09 - 001.XML

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1 (3) DEPOSIT OF REBATES INTO MEDICARE PRE-
2 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c)

3 of such Act (42 U.S.C. 1395w–116(c)) is amended
4 by adding at the end the following new paragraph:
5 ‘‘(6) REBATE FOR FULL-BENEFIT DUAL ELIGI-
6 BLE MEDICARE DRUG PLAN ENROLLEES.—Amounts
7 paid under a rebate agreement under section

8 1860D–2(f) shall be deposited into the Account and
9 shall be used to pay for all or part of the gradual
10 elimination of the coverage gap under section
11 1860D–2(b)(7).’’.
12 SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN
13 ORIGINAL COVERAGE GAP.
14 Section 1860D–2 of the Social Security Act (42

15 U.S.C. 1395w–102), as amended by section 1181(a), is
16 amended—
17 (1) in subsection (b)(4)(C)(ii), by inserting
18 ‘‘subject to subsection (g)(2)(C),’’ after ‘‘(ii)’’;
19 (2) in subsection (e)(1), in the matter before
20 subparagraph (A), by striking ‘‘subsection (f)’’ and
21 inserting ‘‘subsections (f) and (g)’’ after ‘‘this sub-
22 section’’; and
23 (3) by adding at the end the following new sub-
24 section:
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1 ‘‘(g) REQUIREMENT FOR MANUFACTURER DISCOUNT
2 AGREEMENT FOR CERTAIN QUALIFYING DRUGS.—
3 ‘‘(1) IN GENERAL.—In this part, the term ‘cov-
4 ered part D drug’ does not include any drug or bio-
5 logic that is manufactured by a manufacturer that
6 has not entered into and have in effect for all quali-
7 fying drugs (as defined in paragraph (5)(A)) a dis-
8 count agreement described in paragraph (2).
9 ‘‘(2) DISCOUNT AGREEMENT.—
10 ‘‘(A) PERIODIC DISCOUNTS.—A discount

11 agreement under this paragraph shall require
12 the manufacturer involved to provide, to each
13 PDP sponsor with respect to a prescription
14 drug plan or each MA organization with respect
15 to each MA–PD plan, a discount in an amount
16 specified in paragraph (3) for qualifying drugs
17 (as defined in paragraph (5)(A)) of the manu-
18 facturer dispensed to a qualifying enrollee after
19 December 31, 2010, insofar as the individual is
20 in the original gap in coverage (as defined in
21 paragraph (5)(E)).
22 ‘‘(B) DISCOUNT AGREEMENT.—Insofar as
23 not inconsistent with this subsection, the Sec-
24 retary shall establish terms and conditions of
25 such agreement, including terms and conditions
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1 relating to compliance, similar to the terms and
2 conditions for rebate agreements under para-
3 graphs (2), (3), and (4) of section 1927(b), ex-
4 cept that—
5 ‘‘(i) discounts shall be applied under
6 this subsection to prescription drug plans
7 and MA–PD plans instead of State plans
8 under title XIX;
9 ‘‘(ii) PDP sponsors and MA organiza-
10 tions shall be responsible, instead of
11 States, for provision of necessary utiliza-
12 tion information to drug manufacturers;
13 and
14 ‘‘(iii) sponsors and MA organizations
15 shall be responsible for reporting informa-
16 tion on drug-component negotiated price,
17 instead of other manufacturer prices.
18 ‘‘(C) COUNTING DISCOUNT TOWARD TRUE
19 OUT-OF-POCKET COSTS.—Under the discount

20 agreement, in applying subsection (b)(4), with
21 regard to subparagraph (C)(i) of such sub-
22 section, if a qualified enrollee purchases the
23 qualified drug insofar as the enrollee is in an
24 actual gap of coverage (as defined in paragraph
25 (5)(D)), the amount of the discount under the
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1 agreement shall be treated and counted as costs
2 incurred by the plan enrollee.
3 ‘‘(3) DISCOUNT AMOUNT.—The amount of the
4 discount specified in this paragraph for a discount
5 period for a plan is equal to 50 percent of the
6 amount of the drug-component negotiated price (as
7 defined in paragraph (5)(C)) for qualifying drugs for
8 the period involved.
9 ‘‘(4) ADDITIONAL TERMS.—In the case of a dis-
10 count provided under this subsection with respect to
11 a prescription drug plan offered by a PDP sponsor
12 or an MA–PD plan offered by an MA organization,
13 if a qualified enrollee purchases the qualified drug—
14 ‘‘(A) insofar as the enrollee is in an actual
15 gap of coverage (as defined in paragraph
16 (5)(D)), the sponsor or plan shall provide the
17 discount to the enrollee at the time the enrollee
18 pays for the drug; and
19 ‘‘(B) insofar as the enrollee is in the por-
20 tion of the original gap in coverage (as defined
21 in paragraph (5)(E)) that is not in the actual
22 gap in coverage, the discount shall not be ap-
23 plied against the negotiated price (as defined in
24 subsection (d)(1)(B)) for the purpose of calcu-
25 lating the beneficiary payment.
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1 ‘‘(5) DEFINITIONS.—In this subsection:
2 ‘‘(A) QUALIFYING DRUG.—The term
3 ‘qualifying drug’ means, with respect to a pre-
4 scription drug plan or MA–PD plan, a drug or
5 biological product that—
6 ‘‘(i)(I) is a drug produced or distrib-
7 uted under an original new drug applica-
8 tion approved by the Food and Drug Ad-
9 ministration, including a drug product
10 marketed by any cross-licensed producers
11 or distributors operating under the new
12 drug application;
13 ‘‘(II) is a drug that was originally
14 marketed under an original new drug ap-
15 plication approved by the Food and Drug
16 Administration; or
17 ‘‘(III) is a biological product as ap-
18 proved under Section 351(a) of the Public
19 Health Services Act;
20 ‘‘(ii) is covered under the formulary of
21 the plan; and
22 ‘‘(iii) is dispensed to an individual
23 who is in the original gap in coverage.
24 ‘‘(B) QUALIFYING ENROLLEE.—The term
25 ‘qualifying enrollee’ means an individual en-
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1 rolled in a prescription drug plan or MA–PD
2 plan other than such an individual who is a
3 subsidy-eligible individual (as defined in section
4 1860D–14(a)(3)).
5 ‘‘(C) DRUG-COMPONENT NEGOTIATED
6 PRICE.—The term ‘drug-component negotiated

7 price’ means, with respect to a qualifying drug,
8 the negotiated price (as defined in subsection
9 (d)(1)(B)), as determined without regard to any
10 dispensing fee, of the drug under the prescrip-
11 tion drug plan or MA–PD plan involved.
12 ‘‘(D) ACTUAL GAP IN COVERAGE.—The
13 term ‘actual gap in coverage’ means the gap in

14 prescription drug coverage that occurs between
15 the initial coverage limit (as modified under
16 subparagraph (B) of subsection (b)(7)) and the
17 annual out-of-pocket threshold (as modified
18 under subparagraph (C) of such subsection).
19 ‘‘(E) ORIGINAL GAP IN COVERAGE.—The
20 term ‘original in gap coverage’ means the gap

21 in prescription drug coverage that would occur
22 between the initial coverage limit (described in
23 subsection (b)(3)) and the out-of-pocket thresh-
24 old (as defined in subsection (b)(4))(B) if sub-
25 section (b)(7) did not apply.’’.
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1 SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS-
2 SION OF CLAIMS BY PHARMACIES LOCATED
3 IN OR CONTRACTING WITH LONG-TERM CARE
4 FACILITIES.
5 (a) PART D SUBMISSION.—Section 1860D–12(b) of

6 the Social Security Act (42 U.S.C. 1395w–112(b)), as
7 amended by section 172(a)(1) of Public Law 110–275, is
8 amended by striking paragraph (5) and redesignating
9 paragraph (6) and paragraph (7), as added by section
10 1181(b)(2), as paragraph (5) and paragraph (6), respec-
11 tively.
12 (b) SUBMISSION TO MA–PD PLANS.—Section
13 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-
14 27(f)(3)), as added by section 171(b) of Public Law 110–
15 275 and amended by section 172(a)(2) of such Public
16 Law, is amended by striking subparagraph (B) and redes-
17 ignating subparagraph (C) as subparagraph (B).
18 (c) EFFECTIVE DATE.—The amendments made by
19 this section shall apply for contract years beginning with
20 2010.
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376
1 SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS-
2 SISTANCE PROGRAMS AND INDIAN HEALTH
3 SERVICE IN PROVIDING PRESCRIPTION
4 DRUGS TOWARD THE ANNUAL OUT-OF-POCK-
5 ET THRESHOLD UNDER PART D.
6 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the

7 Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is
8 amended—
9 (1) in clause (i), by striking ‘‘and’’ at the end;
10 (2) in clause (ii)—
11 (A) by striking ‘‘such costs shall be treated
12 as incurred only if’’ and inserting ‘‘subject to
13 clause (iii), such costs shall be treated as in-
14 curred only if’’;
15 (B) by striking ‘‘, under section 1860D–
16 14, or under a State Pharmaceutical Assistance
17 Program’’; and
18 (C) by striking the period at the end and
19 inserting ‘‘; and’’; and
20 (3) by inserting after clause (ii) the following
21 new clause:
22 ‘‘(iii) such costs shall be treated as in-
23 curred and shall not be considered to be
24 reimbursed under clause (ii) if such costs
25 are borne or paid—
26 ‘‘(I) under section 1860D–14;
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Eposit of Rebates Into Medicare Pre Scription Drug Account: F:/P11/NHI/TRICOMM/AAHCA09 - 001.XML

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2 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c)

6 BLE MEDICARE DRUG PLAN ENROLLEES.—Amounts

7 paid under a rebate agreement under section

13 ORIGINAL COVERAGE GAP.

14 Section 1860D–2 of the Social Security Act (42

10 ‘‘(A) PERIODIC DISCOUNTS.—A discount

19 OUT-OF-POCKET COSTS.—Under the discount

6 PRICE.—The term ‘drug-component negotiated

13 term ‘actual gap in coverage’ means the gap in

20 term ‘original in gap coverage’ means the gap

2 SION OF CLAIMS BY PHARMACIES LOCATED

3 IN OR CONTRACTING WITH LONG-TERM CARE

5 (a) PART D SUBMISSION.—Section 1860D–12(b) of

2 SISTANCE PROGRAMS AND INDIAN HEALTH

3 SERVICE IN PROVIDING PRESCRIPTION

4 DRUGS TOWARD THE ANNUAL OUT-OF-POCK-

5 ET THRESHOLD UNDER PART D.

6 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the

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