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United States Code (Last Updated: May 24, 2014) |
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Title 42. THE PUBLIC HEALTH AND WELFARE |
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Chapter 7. SOCIAL SECURITY |
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SubChapter XIX. GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS |
§ 1396r–8. Payment for covered outpatient drugs
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(a) Requirement for rebate agreement (1) In general In order for payment to be available under section 1396b(a) of this title or under part B of subchapter XVIII of this chapter for covered outpatient drugs of a manufacturer, the manufacturer must have entered into and have in effect a rebate agreement described in subsection (b) of this section 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 toApril 1, 1991 , shall be deemed to have been entered into onJanuary 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 onJanuary 1, 1991 . If a manufacturer has not entered into such an agreement beforeMarch 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.(2) Effective date Paragraph (1) shall first apply to drugs dispensed under this subchapter on or after
January 1, 1991 .(3) Authorizing payment for drugs not covered under rebate agreements 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) of this section, 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.
(4) Effect on existing agreements 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 onNovember 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.(5) Limitation on prices of drugs purchased by covered entities (A) Agreement with Secretary 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 .(B) “Covered entity” defined In this subsection, the term “covered entity” means an entity described in section 256b(a)(4) of this title.
(C) Establishment of alternative mechanism to ensure against duplicate discounts or rebates 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:(i) Entities 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.
(ii) State agency 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) of this section with respect to such a drug.
(D) Effect of subsequent amendments 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 .(E) Determination of compliance 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 afterNovember 4, 1992 .(6) Requirements relating to master agreements for drugs procured by Department of Veterans Affairs and certain other Federal agencies (A) In general 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.
(B) Effect of subsequent amendments 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 .(C) Determination of compliance 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 afterNovember 4, 1992 .(7) Requirement for submission of utilization data for certain physician administered drugs (A) Single source drugs 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.(B) Multiple source drugs (i) Identification of most frequently physician administered multiple source drugs 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.(ii) Requirement 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.(C) Use of NDC codes 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.(D) Hardship waiver 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.
(b) Terms of rebate agreement (1) Periodic rebates (A) In general 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) of this section 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.(B) Offset against medical assistance Amounts received by a State under this section (or under an agreement authorized by the Secretary under subsection (a)(1) of this section or an agreement described in subsection (a)(4) of this section) in any quarter 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.
(C) Special rule for increased minimum rebate percentage (i) In general 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—(I) 100 percent minus the Federal medical assistance percentage applicable to the rebate period for the State; and (II) the amounts received by the State under such subparagraph that are attributable (as estimated by the Secretary based on utilization and other data) to the increase in the minimum rebate percentage effected by the amendments made by subsections (a)(1), (b), and (d) of section 2501 of the Patient Protection and Affordable Care Act, taking into account the additional drugs included under the amendments made by subsection (c) of section 2501 of such Act. 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. (ii) Manner of payment reduction 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.
(2) State provision of information (A) State responsibility 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.(B) Audits 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.
(3) Manufacturer provision of price information (A) In general Each manufacturer with an agreement in effect under this section shall report to the Secretary— (i) not later than 30 days after the last day of each rebate period under the agreement— (I) on the average manufacturer price (as defined in subsection (k)(1)) for covered outpatient drugs for the rebate period under the agreement (including for all such drugs that are sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(c)]); and (II) for single source drugs and innovator multiple source drugs (including all such drugs that are sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act), on the manufacturer’s best price (as defined in subsection (c)(1)(C)) for such drugs for the rebate period under the agreement; (ii) not later than 30 days after the date of entering into an agreement under this section on the average manufacturer price (as defined in subsection (k)(1) of this section) as of October 1, 1990 for each of the manufacturer’s covered outpatient drugs (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); and 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) of this section) for such drug, biological product, or insulin.(4) Nonprescription drugs 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.
(5) Manufacturer The term “manufacturer” means any entity which is engaged in— (A) the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or (B) in the packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law. (6) Medically accepted indication 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) of this section.
(7) Multiple source drug; innovator multiple source drug; noninnovator multiple source drug; single source drug (A) Defined (i) Multiple source drug The term “multiple source drug” means, with respect to a rebate period, a covered outpatient drug (not including any drug described in paragraph (5)) for which there 5 at least 1 other drug product which— (I) is rated as therapeutically equivalent (under the Food and Drug Administration’s most recent publication of “Approved Drug Products with Therapeutic Equivalence Evaluations”), (II) except as provided in subparagraph (B), is pharmaceutically equivalent and bioequivalent, as defined in subparagraph (C) and as determined by the Food and Drug Administration, and (III) is sold or marketed in the United States during the period. (ii) Innovator multiple source drug The term “innovator multiple source drug” means a multiple source drug that was originally marketed under an original new drug application approved by the Food and Drug Administration.
(iii) Noninnovator multiple source drug The term “noninnovator multiple source drug” means a multiple source drug that is not an innovator multiple source drug.
(iv) Single source drug The term “single source drug” means a covered outpatient drug which is produced or distributed under an original 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.
(B) Exception 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).
(C) Definitions For purposes of this paragraph— (i) drug products are pharmaceutically equivalent if the products contain identical amounts of the same active drug ingredient in the same dosage form and meet compendial or other applicable standards of strength, quality, purity, and identity; and (ii) drugs are bioequivalent if they do not present a known or potential bioequivalence problem, or, if they do present such a problem, they are shown to meet an appropriate standard of bioequivalence. (8) Rebate period The term “rebate period” means, with respect to an agreement under subsection (a) of this section, a calendar quarter or other period specified by the Secretary with respect to the payment of rebates under such agreement.
(9) State agency 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.
(10) Retail community pharmacy 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.
(11) Wholesaler 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) manufacturers, repackers, distributors, own-label distributors, private-label distributors, jobbers, brokers, warehouses (including manufacturer’s and distributor’s warehouses, chain drug warehouses, and wholesale drug warehouses) independent wholesale drug traders, and retail community pharmacies that conduct wholesale distributions.
References In Text
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 1395w–104(c)(2)(E) of this title, referred to in subsec. (b)(3)(D), was redesignated section 1395w–104(c)(2)(G) of this title by Pub. L. 111–148, title X, § 10328(a),
The Internal Revenue Code of 1986, referred to in subsec. (c)(1)(D)(i)(IV)(aa), is classified generally to Title 26, Internal Revenue Code.
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),
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), 125(a)(1),
Codification
Subsec. (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
Prior Provisions
A prior section 1927 of act
Amendments
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
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
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
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
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
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
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
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
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 of this chapter” 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) of this section” 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
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
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
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) of this section) 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) of this section.” 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
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) of this section” 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 “
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
“(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
Effective Date Of Amendment
Pub. L. 111–226, title II, § 202,
Pub. L. 111–152, title I, § 1206(b),
Pub. L. 111–148, title II, § 2501(d)(2),
Pub. L. 111–148, title II, § 2502(b),
Pub. L. 111–148, title II, § 2503(d),
Amendment by section 3301(d)(2) of Pub. L. 111–148 applicable to drugs dispensed on or after
Amendment by section 4107(b) of Pub. L. 111–148 effective
Pub. L. 111–8, div. F, title II, § 221(b),
Pub. L. 109–432, div. B, title IV, § 405(c)(2)(A),
Pub. L. 109–171, title VI, § 6001(f)(3),
Pub. L. 109–171, title VI, § 6001(g),
Pub. L. 109–171, title VI, § 6003(c),
Pub. L. 109–171, title VI, § 6004(b),
Amendment by Pub. L. 109–91 applicable to drugs dispensed on or after
Pub. L. 108–173, title I, § 103(e)(2),
Pub. L. 106–113, div. B, § 1000(a)(6) [title VI, § 606(b)],
Amendment by section 1000(a)(6) [title VI, § 608(u)] of Pub. L. 106–113 effective
Amendment by Pub. L. 105–33 effective
Pub. L. 103–66, title XIII, § 13602(d),
Pub. L. 103–18, § 2(b),
Pub. L. 102–585, title VI, § 601(e),
Miscellaneous
Pub. L. 109–171, title VI, § 6001(c)(3),
Pub. L. 110–275, title II, § 203,
Amendment 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.
Pub. L. 102–585, title VI, § 601(d),
Pub. L. 101–508, title IV, § 4401(c),
Pub. L. 101–508, title IV, § 4401(d),