{"identifier":"/us/usc/t42/s1395w\u20133a","title":42,"num":"\u00a7\u202f1395w\u20133a.","heading":"Use of average sales price payment methodology","text":"\u00a7\u202f1395w\u20133a.\nUse of average sales price payment methodology\n(a)\nApplication\n(1)\nIn general\nExcept as provided in paragraph (2), this section shall apply to payment for drugs and biologicals that are described in section 1395u(\no\nJanuary 1, 2005\n(2)\nElection\nThis section shall not apply in the case of a physician who elects under subsection (a)(1)(A)(ii) of\nsection 1395w\u20133b of this title\n(b)\nPayment amount\n(1)\nIn general\nSubject to paragraph (7) and subsections (d)(3)(C) and (e), the amount of payment determined under this section for the billing and payment code for a drug or biological (based on a minimum dosage unit) is, subject to applicable deductible and coinsurance\u2014\n(A) in the case of a multiple source drug (as defined in subsection (c)(6)(C)), 106 percent of the amount determined under paragraph (3) for a multiple source drug furnished before\nApril 1, 2008\nApril 1, 2008\n(B) in the case of a single source drug or biological (as defined in subsection (c)(6)(D)), 106 percent of the amount determined under paragraph (4) or in the case of such a drug or biological product that is a selected drug (as referred to in\nsection 1320f\u20131(c) of this title\nsection 1320f(b)(2) of this title\nsection 1320f(c)(3) of this title\n(C) in the case of a biosimilar biological product (as defined in subsection (c)(6)(H)), the amount determined under paragraph (8).\n(2)\nSpecification of unit\n(A)\nSpecification by manufacturer\nThe manufacturer of a drug or biological shall specify the unit associated with each National Drug Code (including package size) as part of the submission of data under\nsection 1396r\u20138(b)(3)(A)(iii) of this title\n(B)\nUnit defined\nIn this section, the term \u201cunit\u201d means, with respect to each National Drug Code (including package size) associated with a drug or biological, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological that is dispensed, exclusive of any diluent without reference to volume measures pertaining to liquids. For years after 2004, the Secretary may establish the unit for a manufacturer to report and methods for counting units as the Secretary determines appropriate to implement this section.\n(3)\nMultiple source drug\nFor all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under\n(A) computing the sum of the products (for each National Drug Code assigned to such drug products) of\u2014\n(i) the manufacturer\u2019s average sales price (as defined in subsection (c)); and\n(ii) the total number of units specified under paragraph (2) sold; and\n(B) dividing the sum determined under subparagraph (A) by the sum of the total number of units under subparagraph (A)(ii) for all National Drug Codes assigned to such drug products.\n(4)\nSingle source drug or biological\nThe amount specified in this paragraph for a single source drug or biological is the lesser of the following:\n(A)\nAverage sales price\nThe average sales price as determined using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before\nApril 1, 2008\nApril 1, 2008\n(B)\nWholesale acquisition cost (WAC)\nThe wholesale acquisition cost (as defined in subsection (c)(6)(B)) using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before\nApril 1, 2008\nApril 1, 2008\n(5)\nBasis for payment amount\nThe payment amount shall be determined under this subsection based on information reported under subsection (f) and without regard to any special packaging, labeling, or identifiers on the dosage form or product or package.\n(6)\nUse of volume-weighted average sales prices in calculation of average sales price\n(A)\nIn general\nFor all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under\n(i) computing the sum of the products (for each National Drug Code assigned to such drug products) of\u2014\n(I) the manufacturer\u2019s average sales price (as defined in subsection (c)), determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code; and\n(II) the total number of units specified under paragraph (2) sold; and\n(ii) dividing the sum determined under clause (i) by the sum of the products (for each National Drug Code assigned to such drug products) of\u2014\n(I) the total number of units specified under paragraph (2) sold; and\n(II) the total number of billing units for the National Drug Code for the billing and payment code.\n(B)\nBilling unit defined\nFor purposes of this subsection, the term \u201cbilling unit\u201d means the identifiable quantity associated with a billing and payment code, as established by the Secretary.\n(7)\nSpecial rule\nBeginning with\n(A) each single source drug or biological described in section 1395u(\n(i) the payment amount that would be determined for such drug or biological applying such subsection; or\n(ii) the payment amount that would have been determined for such drug or biological if such subsection were not applied; and\n(B) a multiple source drug described in section 1395u(\n(i) the payment amount that would be determined for such drug or biological taking into account the application of such subsection; or\n(ii) the payment amount that would have been determined for such drug or biological if such subsection were not applied.\n(8)\nBiosimilar biological product\n(A)\nIn general\nSubject to subparagraph (B), the amount specified in this paragraph for a biosimilar biological product described in paragraph (1)(C) is the sum of\u2014\n(i) the average sales price as determined using the methodology described under paragraph (6) applied to a biosimilar biological product for all National Drug Codes assigned to such product in the same manner as such paragraph is applied to drugs described in such paragraph; and\n(ii) 6 percent of the amount determined under paragraph (4) for the reference biological product (as defined in subsection (c)(6)(I)).\n(B)\nTemporary payment increase\n(i)\nIn general\nIn the case of a qualifying biosimilar biological product that is furnished during the applicable 5-year period for such product, the amount specified in this paragraph for such product with respect to such period is the sum determined under subparagraph (A), except that clause (ii) of such subparagraph shall be applied by substituting \u201c8 percent\u201d for \u201c6 percent\u201d.\n(ii)\nApplicable 5-year period\nFor purposes of clause (i), the applicable 5-year period for a qualifying biosimilar biological product is\u2014\n(I) in the case of such a product for which payment was made under this paragraph as of\nSeptember 30, 2022\nOctober 1, 2022\n(II) in the case of such a product for which payment is first made under this paragraph during a calendar quarter during the period beginning\nOctober 1, 2022\nDecember 31, 2027\n(iii)\nQualifying biosimilar biological product defined\nFor purposes of this subparagraph, the term \u201cqualifying biosimilar biological product\u201d means a biosimilar biological product described in paragraph (1)(C) with respect to which\u2014\n(I) in the case of a product described in clause (ii)(I), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product; and\n(II) in the case of a product described in clause (ii)(II), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product.\n(c)\nManufacturer\u2019s average sales price\n(1)\nIn general\nFor purposes of this section, subject to paragraphs (2) and (3), the manufacturer\u2019s \u201caverage sales price\u201d means, of a drug or biological for a National Drug Code for a calendar quarter for a manufacturer for a unit\u2014\n(A) the manufacturer\u2019s sales to all purchasers (excluding sales exempted in paragraph (2)) in the United States for such drug or biological in the calendar quarter; divided by\n(B) the total number of such units of such drug or biological sold by the manufacturer in such quarter.\n(2)\nCertain sales exempted from computation\nIn calculating the manufacturer\u2019s average sales price under this subsection, the following sales shall be excluded:\n(A)\nSales exempt from best price\nSales exempt from the inclusion in the determination of \u201cbest price\u201d under\nsection 1396r\u20138(c)(1)(C)(i) of this title\n(B)\nSales at nominal charge\nSuch other sales as the Secretary identifies as sales to an entity that are merely nominal in amount (as applied for purposes of\nsection 1396r\u20138(c)(1)(C)(ii)(III) of this title\n(3)\nSale price net of discounts\nIn calculating the manufacturer\u2019s average sales price under this subsection, such price shall include volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under subsection (i),\nsection 1396r\u20138 of this title\nsection 1395w\u2013114b of this title\n(4)\nPayment methodology in cases where average sales price during first quarter of sales is unavailable\n(A)\nIn general\nSubject to subparagraph (B), in the case of a drug or biological during an initial period (not to exceed a full calendar quarter) in which data on the prices for sales for the drug or biological is not sufficiently available from the manufacturer to compute an average sales price for the drug or biological, the Secretary may determine the amount payable under this section\u2014\n(i) in the case of a drug or biological furnished prior to\n(I) the wholesale acquisition cost; or\n(II) the methodologies in effect under this part on\nNovember 1, 2003\n(ii) in the case of a drug or biological furnished on or after\n(I) at an amount not to exceed 103 percent of the wholesale acquisition cost; or\n(II) based on the methodologies in effect under this part on\nNovember 1, 2003\n(B)\nLimitation on payment amount for biosimilar biological products during initial period\nIn the case of a biosimilar biological product furnished on or after\n(i) The amount determined under clause (ii) of such subparagraph for the biosimilar biological product.\n(ii) The amount determined under subsection (b)(1)(B) for the reference biological product.\n(5)\nFrequency of determinations\n(A)\nIn general on a quarterly basis\nThe manufacturer\u2019s average sales price, for a drug or biological of a manufacturer, shall be calculated by such manufacturer under this subsection on a quarterly basis. In making such calculation insofar as there is a lag in the reporting of the information on rebates and chargebacks under paragraph (3) so that adequate data are not available on a timely basis, the manufacturer shall apply a methodology based on a 12-month rolling average for the manufacturer to estimate costs attributable to rebates and chargebacks. For years after 2004, the Secretary may establish a uniform methodology under this subparagraph to estimate and apply such costs.\n(B)\nUpdates in payment amounts\nThe payment amounts under subsection (b) shall be updated by the Secretary on a quarterly basis and shall be applied based upon the manufacturer\u2019s average sales price calculated for the most recent calendar quarter for which data is available.\n(C)\nUse of contractors; implementation\nThe Secretary may contract with appropriate entities to calculate the payment amount under subsection (b). Notwithstanding any other provision of law, the Secretary may implement, by program instruction or otherwise, any of the provisions of this section.\n(6)\nDefinitions and other rules\nIn this section:\n(A)\nManufacturer\nThe term \u201cmanufacturer\u201d means, with respect to a drug or biological, the manufacturer (as defined in\nsection 1396r\u20138(k)(5) of this title\n(B)\nWholesale acquisition cost\nThe term \u201cwholesale acquisition cost\u201d means, with respect to a drug or biological, the manufacturer\u2019s list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.\n(C)\nMultiple source drug\n(i)\nIn general\nThe term \u201cmultiple source drug\u201d means, for a calendar quarter, a drug for which there are 2 or more drug products which\u2014\n(I) are rated as therapeutically equivalent (under the Food and Drug Administration\u2019s most recent publication of \u201cApproved Drug Products with Therapeutic Equivalence Evaluations\u201d),\n(II) except as provided in subparagraph (E), are pharmaceutically equivalent and bioequivalent, as determined under subparagraph (F) and as determined by the Food and Drug Administration, and\n(III) are sold or marketed in the United States during the quarter.\n(ii)\nException\nWith respect to single source drugs or biologicals that are within the same billing and payment code as of\nOctober 1, 2003\n(D)\nSingle source drug or biological\nThe term \u201csingle source drug or biological\u201d means\u2014\n(i) a biological; or\n(ii) a drug which is not a multiple source drug and 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.\n(E)\nException from pharmaceutical equivalence and bioequivalence requirement\nSubparagraph (C)(ii) shall not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in subparagraph (C)(i), in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent, as defined in subparagraph (F).\n(F)\nDetermination of pharmaceutical equivalence and bioequivalence\nFor purposes of this paragraph\u2014\n(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\n(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.\n(G)\nInclusion of vaccines\nIn applying provisions of\nsection 1396r\u20138 of this title\nsection 1396r\u20138(k)(2)(B) of this title\n(H)\nBiosimilar biological product\nThe term \u201cbiosimilar biological product\u201d means a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed under\nsection 262 of this title\n(I)\nReference biological product\nThe term \u201creference biological product\u201d means the biological product licensed under such\nsection 262 of this title\n(d)\nMonitoring of market prices\n(1)\nIn general\nThe Inspector General of the Department of Health and Human Services shall conduct studies, which may include surveys, to determine the widely available market prices of drugs and biologicals to which this section applies, as the Inspector General, in consultation with the Secretary, determines to be appropriate.\n(2)\nComparison of prices\nBased upon such studies and other data for drugs and biologicals, the Inspector General shall compare the average sales price under this section for drugs and biologicals with\u2014\n(A) the widely available market price for such drugs and biologicals (if any); and\n(B) the average manufacturer price (as determined under\nsection 1396r\u20138(k)(1) of this title\n(3)\nLimitation on average sales price\n(A)\nIn general\nThe Secretary may disregard the average sales price for a drug or biological that exceeds the widely available market price or the average manufacturer price for such drug or biological by the applicable threshold percentage (as defined in subparagraph (B)).\n(B)\nApplicable threshold percentage defined\nIn this paragraph, the term \u201capplicable threshold percentage\u201d means\u2014\n(i) in 2005, in the case of an average sales price for a drug or biological that exceeds widely available market price or the average manufacturer price, 5 percent; and\n(ii) in 2006 and subsequent years, the percentage applied under this subparagraph subject to such adjustment as the Secretary may specify for the widely available market price or the average manufacturer price, or both.\n(C)\nAuthority to adjust average sales price\nIf the Inspector General finds that the average sales price for a drug or biological exceeds such widely available market price or average manufacturer price for such drug or biological by the applicable threshold percentage, the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this subparagraph) and the Secretary shall, effective as of the next quarter, substitute for the amount of payment otherwise determined under this section for such drug or biological the lesser of\u2014\n(i) the widely available market price for the drug or biological (if any); or\n(ii) 103 percent of the average manufacturer price (as determined under\nsection 1396r\u20138(k)(1) of this title\n(4)\nCivil money penalty\n(A)\nMisrepresentation\nIf the Secretary determines that a manufacturer has made a misrepresentation in the reporting of the manufacturer\u2019s average sales price for a drug or biological, the Secretary may apply a civil money penalty in an amount of up to $10,000 for each such price misrepresentation and for each day in which such price misrepresentation was applied.\n(B)\nFailure to provide timely information\nIf the Secretary determines that a manufacturer described in subsection (f)(2) has failed to report on information described in\nsection 1396r\u20138(b)(3)(A)(iii) of this title\n(C)\nFalse information\nAny manufacturer required to submit information under subsection (f)(2) that knowingly provides false 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.\n(D)\nIncreasing oversight and enforcement\nFor calendar quarters beginning on or after\n(i) each reference to \u201cunder this subparagraph and subsection (c)(4)(B)(ii)(III)\u201d were a reference to \u201cunder this subparagraph, subsection (c)(4)(B)(ii)(III), and subparagraphs (A), (B), and (C) of\nsection 1395w\u20133a(d)(4) of this title\n(ii) the reference to \u201cactivities related to the oversight and enforcement of this section and agreements under this section\u201d were a reference to \u201cactivities related to the oversight and enforcement of this section and under subsection (f)(2) of\nsection 1395w\u20133a of this title\nsection 1395w\u20133a(d)(4) of this title\n(E)\nProcedures\nThe provisions of\nsection 1320a\u20137a of this title\nsection 1320a\u20137a(a) of this title\n(5)\nWidely available market price\n(A)\nIn general\nIn this subsection, the term \u201cwidely available market price\u201d means the price that a prudent physician or supplier would pay for the drug or biological. In determining such price, the Inspector General shall take into account the discounts, rebates, and other price concessions routinely made available to such prudent physicians or suppliers for such drugs or biologicals.\n(B)\nConsiderations\nIn determining the price under subparagraph (A), the Inspector General shall consider information from one or more of the following sources:\n(i) Manufacturers.\n(ii) Wholesalers.\n(iii) Distributors.\n(iv) Physician supply houses.\n(v) Specialty pharmacies.\n(vi) Group purchasing arrangements.\n(vii) Surveys of physicians.\n(viii) Surveys of suppliers.\n(ix) Information on such market prices from insurers.\n(x) Information on such market prices from private health plans.\n(e)\nAuthority to use alternative payment in response to public health emergency\nIn the case of a public health emergency under\nsection 247d of this title\n1\n1 So in original. The comma probably should not appear.\n(f)\nQuarterly report on average sales price\n(1)\nIn general\nFor requirements for reporting the manufacturer\u2019s average sales price (and, if required to make payment, the manufacturer\u2019s wholesale acquisition cost) for the drug or biological under this section, see\nsection 1396r\u20138(b)(3) of this title\n(2)\nManufacturers without a rebate agreement under subchapter xix\n(A)\nIn general\nIf the manufacturer of a drug or biological described in subparagraph (C), (E), or (G) of section 1395u(\no\nsection 1395rr(b)(14)(B) of this title\nsection 1396r\u20138 of this title\nJanuary 1, 2022\nsection 1396r\u20138 of this title\n(B)\nAudit\nInformation reported under subparagraph (A) is subject to audit by the Inspector General of the Department of Health and Human Services.\n(C)\nVerification\nThe Secretary may survey wholesalers and manufacturers that directly distribute drugs or biologicals described in subparagraph (A), when necessary, to verify manufacturer prices and manufacturer\u2019s 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 such a drug or biological 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\nsection 1320a\u20137a of this title\nsection 1320a\u20137a(a) of this title\n(D)\nConfidentiality\nNotwithstanding any other provision of law, information disclosed by manufacturers or wholesalers under this paragraph (other than the wholesale acquisition cost for purposes of carrying out this section) is confidential and shall not be disclosed by the Secretary in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs or biologicals by such manufacturer or wholesaler, except\u2014\n(i) as the Secretary determines to be necessary to carry out this section (including the determination and implementation of the payment amount), or to carry out\nsection 1320a\u20137b of this title\n(ii) to permit the Comptroller General of the United States to review the information provided;\n(iii) to permit the Director of the Congressional Budget Office to review the information provided;\n(iv) to permit the Medicare Payment Advisory Commission to review the information provided; and\n(v) to permit the Medicaid and CHIP Payment and Access Commission to review the information provided.\n(g)\nPayment adjustment for certain drugs for which there is a self-administered NDC\n(1)\nOIG studies\nThe Inspector General of the Department of Health and Human Services shall conduct periodic studies to identify National Drug Codes for drug or biological products that are self-administered for which payment may not be made under this part because such products are not covered pursuant to\nsection 1395x(s)(2) of this title\n(2)\nPayment adjustment\nIf the Inspector General identifies a National Drug Code for a drug or biological product under paragraph (1), the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this paragraph) and the Secretary shall, to the extent the Secretary deems appropriate, apply as the amount of payment under this section for the applicable billing and payment code the lesser of\u2014\n(A) the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such product so identified under paragraph (1) were excluded from such determination; or\n(B) the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.\n(3)\nApplication to certain identified products\nIn the case of a National Drug Code for a drug or biological product that is self-administered for which payment is not made under this part because such product is not covered pursuant to\n(A) the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such drug or biological products so identified were excluded from such determination; or\n(B) the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.\n(h)\nRefund for certain discarded single-dose container or single-use package drugs\n(1)\nSecretarial provision of information\n(A)\nIn general\nFor each calendar quarter beginning on or after\n(i) Subject to subparagraph (C), information on the total number of units of the billing and payment code of such drug, if any, that were discarded during such quarter, as determined using a mechanism such as the JW modifier used as of\nNovember 15, 2021\n(ii) The refund amount that the manufacturer is liable for pursuant to paragraph (3).\n(B)\nDetermination of discarded amounts\nFor purposes of subparagraph (A)(i), with respect to a refundable single-dose container or single-use package drug furnished during a quarter, the amount of such drug that was discarded shall be determined based on the amount of such drug that was unused and discarded for each drug on the date of service.\n(C)\nExclusion of units of packaged drugs\nThe total number of units of the billing and payment code of a refundable single-dose container or single-use package drug of a manufacturer furnished during a calendar quarter for purposes of subparagraph (A)(i), and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph (3)(A)(ii), shall not include such units that are packaged into the payment amount for an item or service and are not separately payable.\n(2)\nManufacturer requirement\nFor each calendar quarter beginning on or after\nJanuary 1, 2023\n(3)\nRefund amount\n(A)\nIn general\nThe amount of the refund specified in this paragraph is, with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after\n(i) the product of\u2014\n(I) the total number of units of the billing and payment code for such drug that were discarded during such quarter (as determined under paragraph (1)); and\n(II)\n(aa) in the case of a refundable single-dose container or single-use package drug that is a single source drug or biological, the amount of payment determined for such drug or biological under subsection (b)(1)(B) for such quarter; or\n(bb) in the case of a refundable single-dose container or single-use package drug that is a biosimilar biological product, the amount of payment determined for such product under subsection (b)(1)(C) for such quarter; exceeds\n(ii) an amount equal to the applicable percentage (as defined in subparagraph (B)) of the estimated total allowed charges for such drug under this part during the quarter.\n(B)\nApplicable percentage defined\n(i)\nIn general\nFor purposes of subparagraph (A)(ii), the term \u201capplicable percentage\u201d means\u2014\n(I) subject to subclause (II), 10 percent; and\n(II) if applicable, in the case of a refundable single-dose container or single-use package drug described in clause (ii), a percentage specified by the Secretary pursuant to such clause.\n(ii)\nTreatment of drugs that have unique circumstances\nIn the case of a refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product as that described in paragraph (8)(B)(ii), the Secretary, through notice and comment rulemaking, may increase the applicable percentage otherwise applicable under clause (i)(I) as determined appropriate by the Secretary.\n(4)\nFrequency\nAmounts required to be refunded pursuant to paragraph (2) shall be paid in regular intervals (as determined appropriate by the Secretary).\n(5)\nRefund deposits\nAmounts paid as refunds pursuant to paragraph (2) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under\nsection 1395t of this title\n(6)\nEnforcement\n(A)\nAudits\n(i)\nManufacturer audits\nEach manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under this subsection shall be subject to periodic audit with respect to such drug and such refunds by the Secretary.\n(ii)\nProvider audits\nThe Secretary shall conduct periodic audits of claims submitted under this part with respect to refundable single-dose container or single-use package drugs in accordance with the authority under section 1395\nl\n(B)\nCivil money penalty\n(i)\nIn general\nThe Secretary shall impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who has failed to comply with the requirement under paragraph (2) for such drug for a calendar quarter in an amount equal to the sum of\u2014\n(I) the amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter; and\n(II) 25 percent of such amount.\n(ii)\nApplication\nThe provisions of\nsection 1320a\u20137a of this title\nsection 1320a\u20137a(a) of this title\n(7)\nImplementation\nThe Secretary shall implement this subsection through notice and comment rulemaking.\n(8)\nDefinition of refundable single-dose container or single-use package drug\n(A)\nIn general\nExcept as provided in subparagraph (B), in this subsection, the term \u201crefundable single-dose container or single-use package drug\u201d means a single source drug or biological (as defined in subsection (c)(6)(D)) or a biosimilar biological product (as defined in subsection (c)(6)(H)) for which payment is made under this part and that is furnished from a single-dose container or single-use package.\n(B)\nExclusions\nThe term \u201crefundable single-dose container or single-use package drug\u201d does not include\u2014\n(i) a drug or biological that is either a radiopharmaceutical or an imaging agent;\n(ii) a drug or biological approved by the Food and Drug Administration for which dosage and administration instructions included in the labeling require filtration during the drug preparation process, prior to dilution and administration, and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process; or\n(iii) a drug or biological approved by the Food and Drug Administration on or after\nNovember 15, 2021\n(9)\nReport to Congress\nNot later than 3 years after\nNovember 15, 2021\n(i)\nRebate by manufacturers for single source drugs and biologicals with prices increasing faster than inflation\n(1)\nRequirements\n(A)\nSecretarial provision of information\nNot later than 6 months after the end of each calendar quarter beginning on or after\n(i) Information on the total number of units of the billing and payment code described in subparagraph (A)(i) of paragraph (3) with respect to such drug and calendar quarter.\n(ii) Information on the amount (if any) of the excess average sales price increase described in subparagraph (A)(ii) of such paragraph for such drug and calendar quarter.\n(iii) The rebate amount specified under such paragraph for such part B rebatable drug and calendar quarter.\n(B)\nManufacturer requirement\nFor each calendar quarter beginning on or after\nJanuary 1, 2023\n(C)\nTransition rule for reporting\nThe Secretary may, for each part B rebatable drug, delay the timeframe for reporting the information described in subparagraph (A) for calendar quarters beginning in 2023 and 2024 until not later than\nSeptember 30, 2025\n(2)\nPart B rebatable drug defined\n(A)\nIn general\nIn this subsection, the term \u201cpart B rebatable drug\u201d means a single source drug or biological (as defined in subparagraph (D) of subsection (c)(6)), including a biosimilar biological product (as defined in subparagraph (H) of such subsection) but excluding a qualifying biosimilar biological product (as defined in subsection (b)(8)(B)(iii)), for which payment is made under this part, except such term shall not include such a drug or biological\u2014\n(i) if, as determined by the Secretary, the average total allowed charges for such drug or biological under this part for a year per individual that uses such a drug or biological are less than, subject to subparagraph (B), $100; or\n(ii) that is a vaccine described in subparagraph (A) or (B) of\nsection 1395x(s)(10) of this title\n(B)\nIncrease\nThe dollar amount applied under subparagraph (A)(i)\u2014\n(i) for 2024, shall be the dollar amount specified under such subparagraph for 2023, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and\n(ii) for a subsequent year, shall be the dollar amount specified in this clause (or clause (i)) for the previous year (without application of subparagraph (C)), increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year.\n(C)\nRounding\nAny dollar amount determined under subparagraph (B) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.\n(3)\nRebate amount\n(A)\nIn general\nFor purposes of paragraph (1), the amount specified in this paragraph for a part B rebatable drug assigned to a billing and payment code for a calendar quarter is, subject to subparagraphs (B) and (G) and paragraph (4), the estimated amount equal to the product of\u2014\n(i) the total number of units determined under subparagraph (B) for the billing and payment code of such drug; and\n(ii) the amount (if any) by which\u2014\n(I) the amount equal to\u2014\n(aa) in the case of a part B rebatable drug described in paragraph (1)(B) of subsection (b), 106 percent of the amount determined under paragraph (4) of such section\n2\n2 So in original. Probably should be \u201csubsection\u201d.\n(bb) in the case of a part B rebatable drug described in paragraph (1)(C) of such subsection, the payment amount under such paragraph for such drug during the calendar quarter; exceeds\n(II) the inflation-adjusted payment amount determined under subparagraph (C) for such part B rebatable drug during the calendar quarter.\n(B)\nTotal number of units\nFor purposes of subparagraph (A)(i), the total number of units for the billing and payment code with respect to a part B rebatable drug furnished during a calendar quarter described in subparagraph (A) is equal to\u2014\n(i) the number of units for the billing and payment code of such drug furnished during such calendar quarter, minus\n(ii) the number of units for such billing and payment code of such drug furnished during such calendar quarter\u2014\n(I) with respect to which the manufacturer provides a discount under the program under\nsection 256b of this title\nsection 1396r\u20138 of this title\n(II) that are packaged into the payment amount for an item or service and are not separately payable.\n(C)\nDetermination of inflation-adjusted payment amount\nThe inflation-adjusted payment amount determined under this subparagraph for a part B rebatable drug for a calendar quarter is\u2014\n(i) the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter (as defined in subparagraph (D)); increased by\n(ii) the percentage by which the rebate period CPI\u2013U (as defined in subparagraph (F)) for the calendar quarter exceeds the benchmark period CPI\u2013U (as defined in subparagraph (E)).\n(D)\nPayment amount benchmark quarter\nThe term \u201cpayment amount benchmark quarter\u201d means the calendar quarter beginning\nJuly 1, 2021\n(E)\nBenchmark period CPI\u2013U\nThe term \u201cbenchmark period CPI\u2013U\u201d means the consumer price index for all urban consumers (United States city average) for January 2021.\n(F)\nRebate period CPI\u2013U\nThe term \u201crebate period CPI\u2013U\u201d means, with respect to a calendar quarter described in subparagraph (C), the greater of the benchmark period CPI\u2013U and the consumer price index for all urban consumers (United States city average) for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter.\n(G)\nReduction or waiver for shortages and severe supply chain disruptions\nThe Secretary shall reduce or waive the amount under subparagraph (A) with respect to a part B rebatable drug and a calendar quarter\u2014\n(i) in the case of a part B rebatable drug that is described as currently in shortage on the shortage list in effect under\nsection 356e of title 21\n(ii) in the case of a biosimilar biological product, when the Secretary determines there is a severe supply chain disruption during the calendar quarter, such as that caused by a natural disaster or other unique or unexpected event.\n(4)\nSpecial treatment of certain drugs and exemption\n(A)\nSubsequently approved drugs\nIn the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after\nDecember 1, 2020\n(B)\nTimeline for provision of rebates for subsequently approved drugs\nIn the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after\nDecember 1, 2020\nJanuary 1, 2023\nJanuary 1, 2023\n(C)\nSelected drugs\nIn the case of a part B rebatable drug that is a selected drug (as defined in\nsection 1320f\u20131(c) of this title\nsection 1320f(b)(2) of this title\nsection 1320f\u20131(c) of this title\n3\n3 See References in Text note below.\n(5)\nApplication to beneficiary coinsurance\nIn the case of a part B rebatable drug furnished on or after\n(A) in computing the amount of any coinsurance applicable under this part to an individual to whom such drug is furnished, the computation of such coinsurance shall be equal to 20 percent of the inflation-adjusted payment amount determined under paragraph (3)(C) for such part B rebatable drug; and\n(B) the amount of such coinsurance for such calendar quarter, as computed under subparagraph (A), shall be applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply under subparagraphs (B) or (C) of subsection (b)(1).\n(6)\nRebate deposits\nAmounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under\nsection 1395t of this title\n(7)\nCivil money penalty\nIf a manufacturer of a part B rebatable drug has failed to comply with the requirements under paragraph (1)(B) for such drug for a calendar quarter, the manufacturer shall be subject to, in accordance with a process established by the Secretary pursuant to regulations, a civil money penalty in an amount equal to at least 125 percent of the amount specified in paragraph (3) for such drug for such calendar quarter. The provisions of\nsection 1320a\u20137a of this title\nsection 1320a\u20137a(a) of this title\n(8)\nLimitation on administrative or judicial review\nThere shall be no administrative or judicial review of any of the following:\n(A) The determination of units under this subsection.\n(B) The determination of whether a drug is a part B rebatable drug under this subsection.\n(C) The calculation of the rebate amount under this subsection.\n(D) The computation of coinsurance under paragraph (5) of this subsection.\n(E) The computation of amounts paid under section 1395\nl\n(j)\nJudicial review\nThere shall be no administrative or judicial review under\n(1) determinations of payment amounts under this section, including the assignment of National Drug Codes to billing and payment codes;\n(2) the identification of units (and package size) under subsection (b)(2);\n(3) the method to allocate rebates, chargebacks, and other price concessions to a quarter if specified by the Secretary;\n(4) the manufacturer\u2019s average sales price when it is used for the determination of a payment amount under this section; and\n(5) the disclosure of the average manufacturer price by reason of an adjustment under subsection (d)(3)(C) or (e).","url":"https://projectusc.org/usc/t42/s1395w\u20133a.html","content":[{"t":"sec","id":"/us/usc/t42/s1395w\u20133a","children":[{"t":"num","text":"\u00a7\u202f1395w\u20133a."},{"t":"heading","text":"Use of average sales price payment methodology"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Application"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/a/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in paragraph (2), this section shall apply to payment for drugs and biologicals that are described in section 1395u(","children":[{"t":"text","text":"o","tail":")(1)(C) of this title and that are furnished on or after "},{"t":"text","text":"January 1, 2005","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/a/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Election"},{"t":"content","children":[{"t":"p","text":"This section shall not apply in the case of a physician who elects under subsection (a)(1)(A)(ii) of ","children":[{"t":"ref","text":"section 1395w\u20133b of this title","href":"/us/usc/t42/s1395w\u20133b","tail":" for that section to apply instead of this section for the payment for drugs and biologicals."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Payment amount"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Subject to paragraph (7) and subsections (d)(3)(C) and (e), the amount of payment determined under this section for the billing and payment code for a drug or biological (based on a minimum dosage unit) is, subject to applicable deductible and coinsurance\u2014"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" in the case of a multiple source drug (as defined in subsection (c)(6)(C)), 106 percent of the amount determined under paragraph (3) for a multiple source drug furnished before ","children":[{"t":"text","text":"April 1, 2008","tail":", or 106 percent of the amount determined under paragraph (6) for a multiple source drug furnished on or after "},{"t":"text","text":"April 1, 2008","tail":";"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" in the case of a single source drug or biological (as defined in subsection (c)(6)(D)), 106 percent of the amount determined under paragraph (4) or in the case of such a drug or biological product that is a selected drug (as referred to in ","children":[{"t":"ref","text":"section 1320f\u20131(c) of this title","href":"/us/usc/t42/s1320f\u20131/c","tail":"), with respect to a price applicability period (as defined in "},{"t":"ref","text":"section 1320f(b)(2) of this title","href":"/us/usc/t42/s1320f/b/2","tail":"), 106 percent of the maximum fair price (as defined in "},{"t":"ref","text":"section 1320f(c)(3) of this title","href":"/us/usc/t42/s1320f/c/3","tail":") applicable for such drug and a year during such period; or"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" in the case of a biosimilar biological product (as defined in subsection (c)(6)(H)), the amount determined under paragraph (8).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Specification of unit"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Specification by manufacturer"},{"t":"content","children":[{"t":"p","text":"The manufacturer of a drug or biological shall specify the unit associated with each National Drug Code (including package size) as part of the submission of data under ","children":[{"t":"ref","text":"section 1396r\u20138(b)(3)(A)(iii) of this title","href":"/us/usc/t42/s1396r\u20138/b/3/A/iii","tail":" or subsection (f)(2), as applicable."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Unit defined"},{"t":"content","children":[{"t":"p","text":"In this section, the term \u201cunit\u201d means, with respect to each National Drug Code (including package size) associated with a drug or biological, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological that is dispensed, exclusive of any diluent without reference to volume measures pertaining to liquids. For years after 2004, the Secretary may establish the unit for a manufacturer to report and methods for counting units as the Secretary determines appropriate to implement this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Multiple source drug"},{"t":"chapeau","text":"For all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under ","children":[{"t":"ref","text":"section 1396r\u20138(b)(3)(A)(iii) of this title","href":"/us/usc/t42/s1396r\u20138/b/3/A/iii","tail":" or subsection (f)(2), as applicable, determined by\u2014"}]},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/3/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" computing the sum of the products (for each National Drug Code assigned to such drug products) of\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the manufacturer\u2019s average sales price (as defined in subsection (c)); and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the total number of units specified under paragraph (2) sold; and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" dividing the sum determined under subparagraph (A) by the sum of the total number of units under subparagraph (A)(ii) for all National Drug Codes assigned to such drug products.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Single source drug or biological"},{"t":"chapeau","text":"The amount specified in this paragraph for a single source drug or biological is the lesser of the following:"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Average sales price"},{"t":"content","children":[{"t":"p","text":"The average sales price as determined using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before ","children":[{"t":"text","text":"April 1, 2008","tail":", and using the methodology applied under paragraph (6) for single source drugs and biologicals furnished on or after "},{"t":"text","text":"April 1, 2008","tail":", for all National Drug Codes assigned to such drug or biological product."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Wholesale acquisition cost (WAC)"},{"t":"content","children":[{"t":"p","text":"The wholesale acquisition cost (as defined in subsection (c)(6)(B)) using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before ","children":[{"t":"text","text":"April 1, 2008","tail":", and using the methodology applied under paragraph (6) for single source drugs and biologicals furnished on or after "},{"t":"text","text":"April 1, 2008","tail":", for all National Drug Codes assigned to such drug or biological product."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Basis for payment amount"},{"t":"content","children":[{"t":"p","text":"The payment amount shall be determined under this subsection based on information reported under subsection (f) and without regard to any special packaging, labeling, or identifiers on the dosage form or product or package.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Use of volume-weighted average sales prices in calculation of average sales price"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under ","children":[{"t":"ref","text":"section 1396r\u20138(b)(3)(A)(iii) of this title","href":"/us/usc/t42/s1396r\u20138/b/3/A/iii","tail":" or subsection (f)(2), as applicable, determined by\u2014"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" computing the sum of the products (for each National Drug Code assigned to such drug products) of\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the manufacturer\u2019s average sales price (as defined in subsection (c)), determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the total number of units specified under paragraph (2) sold; and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" dividing the sum determined under clause (i) by the sum of the products (for each National Drug Code assigned to such drug products) of\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the total number of units specified under paragraph (2) sold; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/6/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the total number of billing units for the National Drug Code for the billing and payment code.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Billing unit defined"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, the term \u201cbilling unit\u201d means the identifiable quantity associated with a billing and payment code, as established by the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Special rule"},{"t":"chapeau","text":"Beginning with ","children":[{"t":"text","text":"April 1, 2008","tail":", the payment amount for\u2014"}]},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/7/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" each single source drug or biological described in section 1395u(","children":[{"t":"text","text":"o","tail":")(1)(G) of this title that is treated as a multiple source drug because of the application of subsection (c)(6)(C)(ii) is the lower of\u2014"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/7/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the payment amount that would be determined for such drug or biological applying such subsection; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/7/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the payment amount that would have been determined for such drug or biological if such subsection were not applied; and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/7/B","children":[{"t":"num","text":"(B)"},{"t":"chapeau","text":" a multiple source drug described in section 1395u(","children":[{"t":"text","text":"o","tail":")(1)(G) of this title (excluding a drug or biological that is treated as a multiple source drug because of the application of such subsection) is the lower of\u2014"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/7/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the payment amount that would be determined for such drug or biological taking into account the application of such subsection; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/7/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the payment amount that would have been determined for such drug or biological if such subsection were not applied.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/b/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Biosimilar biological product"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/8/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Subject to subparagraph (B), the amount specified in this paragraph for a biosimilar biological product described in paragraph (1)(C) is the sum of\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/8/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the average sales price as determined using the methodology described under paragraph (6) applied to a biosimilar biological product for all National Drug Codes assigned to such product in the same manner as such paragraph is applied to drugs described in such paragraph; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/8/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" 6 percent of the amount determined under paragraph (4) for the reference biological product (as defined in subsection (c)(6)(I)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/b/8/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Temporary payment increase"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"In the case of a qualifying biosimilar biological product that is furnished during the applicable 5-year period for such product, the amount specified in this paragraph for such product with respect to such period is the sum determined under subparagraph (A), except that clause (ii) of such subparagraph shall be applied by substituting \u201c8 percent\u201d for \u201c6 percent\u201d.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Applicable 5-year period"},{"t":"chapeau","text":"For purposes of clause (i), the applicable 5-year period for a qualifying biosimilar biological product is\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" in the case of such a product for which payment was made under this paragraph as of ","children":[{"t":"text","text":"September 30, 2022","tail":", the 5-year period beginning on "},{"t":"text","text":"October 1, 2022","tail":"; and"}],"tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" in the case of such a product for which payment is first made under this paragraph during a calendar quarter during the period beginning ","children":[{"t":"text","text":"October 1, 2022","tail":", and ending "},{"t":"text","text":"December 31, 2027","tail":", the 5-year period beginning on the first day of such calendar quarter during which such payment is first made."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Qualifying biosimilar biological product defined"},{"t":"chapeau","text":"For purposes of this subparagraph, the term \u201cqualifying biosimilar biological product\u201d means a biosimilar biological product described in paragraph (1)(C) with respect to which\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/iii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" in the case of a product described in clause (ii)(I), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/b/8/B/iii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" in the case of a product described in clause (ii)(II), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Manufacturer\u2019s average sales price"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of this section, subject to paragraphs (2) and (3), the manufacturer\u2019s \u201caverage sales price\u201d means, of a drug or biological for a National Drug Code for a calendar quarter for a manufacturer for a unit\u2014"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the manufacturer\u2019s sales to all purchasers (excluding sales exempted in paragraph (2)) in the United States for such drug or biological in the calendar quarter; divided by","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the total number of such units of such drug or biological sold by the manufacturer in such quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Certain sales exempted from computation"},{"t":"chapeau","text":"In calculating the manufacturer\u2019s average sales price under this subsection, the following sales shall be excluded:"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Sales exempt from best price"},{"t":"content","children":[{"t":"p","text":"Sales exempt from the inclusion in the determination of \u201cbest price\u201d under ","children":[{"t":"ref","text":"section 1396r\u20138(c)(1)(C)(i) of this title","href":"/us/usc/t42/s1396r\u20138/c/1/C/i","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Sales at nominal charge"},{"t":"content","children":[{"t":"p","text":"Such other sales as the Secretary identifies as sales to an entity that are merely nominal in amount (as applied for purposes of ","children":[{"t":"ref","text":"section 1396r\u20138(c)(1)(C)(ii)(III) of this title","href":"/us/usc/t42/s1396r\u20138/c/1/C/ii/III","tail":", except as the Secretary may otherwise provide)."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Sale price net of discounts"},{"t":"content","children":[{"t":"p","text":"In calculating the manufacturer\u2019s average sales price under this subsection, such price shall include volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under subsection (i), ","children":[{"t":"ref","text":"section 1396r\u20138 of this title","href":"/us/usc/t42/s1396r\u20138","tail":", or "},{"t":"ref","text":"section 1395w\u2013114b of this title","href":"/us/usc/t42/s1395w\u2013114b","tail":"). For years after 2004, the Secretary may include in such price other price concessions, which may be based on recommendations of the Inspector General, that would result in a reduction of the cost to the purchaser."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Payment methodology in cases where average sales price during first quarter of sales is unavailable"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Subject to subparagraph (B), in the case of a drug or biological during an initial period (not to exceed a full calendar quarter) in which data on the prices for sales for the drug or biological is not sufficiently available from the manufacturer to compute an average sales price for the drug or biological, the Secretary may determine the amount payable under this section\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" in the case of a drug or biological furnished prior to ","children":[{"t":"text","text":"January 1, 2019","tail":", based on\u2014"}]},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the wholesale acquisition cost; or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the methodologies in effect under this part on ","children":[{"t":"text","text":"November 1, 2003","tail":", to determine payment amounts for drugs or biologicals; and"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" in the case of a drug or biological furnished on or after ","children":[{"t":"text","text":"January 1, 2019","tail":"\u2014"}]},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" at an amount not to exceed 103 percent of the wholesale acquisition cost; or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/4/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" based on the methodologies in effect under this part on ","children":[{"t":"text","text":"November 1, 2003","tail":", to determine payment amounts for drugs or biologicals."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Limitation on payment amount for biosimilar biological products during initial period"},{"t":"chapeau","text":"In the case of a biosimilar biological product furnished on or after ","children":[{"t":"text","text":"July 1, 2024","tail":", during the initial period described in subparagraph (A) with respect to the biosimilar biological product, the amount payable under this section for the biosimilar biological product is the lesser of the following:"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/4/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" The amount determined under clause (ii) of such subparagraph for the biosimilar biological product.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/4/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" The amount determined under subsection (b)(1)(B) for the reference biological product.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Frequency of determinations"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general on a quarterly basis"},{"t":"content","children":[{"t":"p","text":"The manufacturer\u2019s average sales price, for a drug or biological of a manufacturer, shall be calculated by such manufacturer under this subsection on a quarterly basis. In making such calculation insofar as there is a lag in the reporting of the information on rebates and chargebacks under paragraph (3) so that adequate data are not available on a timely basis, the manufacturer shall apply a methodology based on a 12-month rolling average for the manufacturer to estimate costs attributable to rebates and chargebacks. For years after 2004, the Secretary may establish a uniform methodology under this subparagraph to estimate and apply such costs.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Updates in payment amounts"},{"t":"content","children":[{"t":"p","text":"The payment amounts under subsection (b) shall be updated by the Secretary on a quarterly basis and shall be applied based upon the manufacturer\u2019s average sales price calculated for the most recent calendar quarter for which data is available.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/5/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Use of contractors; implementation"},{"t":"content","children":[{"t":"p","text":"The Secretary may contract with appropriate entities to calculate the payment amount under subsection (b). Notwithstanding any other provision of law, the Secretary may implement, by program instruction or otherwise, any of the provisions of this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/c/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Definitions and other rules"},{"t":"chapeau","text":"In this section:"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Manufacturer"},{"t":"content","children":[{"t":"p","text":"The term \u201cmanufacturer\u201d means, with respect to a drug or biological, the manufacturer (as defined in ","children":[{"t":"ref","text":"section 1396r\u20138(k)(5) of this title","href":"/us/usc/t42/s1396r\u20138/k/5","tail":"), except that, for purposes of subsection (f)(2), the Secretary may, if the Secretary determines appropriate, exclude repackagers of a drug or biological from such term."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Wholesale acquisition cost"},{"t":"content","children":[{"t":"p","text":"The term \u201cwholesale acquisition cost\u201d means, with respect to a drug or biological, the manufacturer\u2019s list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Multiple source drug"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/C/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cmultiple source drug\u201d means, for a calendar quarter, a drug for which there are 2 or more drug products which\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/6/C/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" are rated as therapeutically equivalent (under the Food and Drug Administration\u2019s most recent publication of \u201cApproved Drug Products with Therapeutic Equivalence Evaluations\u201d),","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/6/C/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" except as provided in subparagraph (E), are pharmaceutically equivalent and bioequivalent, as determined under subparagraph (F) and as determined by the Food and Drug Administration, and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/c/6/C/i/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" are sold or marketed in the United States during the quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Exception"},{"t":"content","children":[{"t":"p","text":"With respect to single source drugs or biologicals that are within the same billing and payment code as of ","children":[{"t":"text","text":"October 1, 2003","tail":", the Secretary shall treat such single source drugs or biologicals as if the single source drugs or biologicals were multiple source drugs."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Single source drug or biological"},{"t":"chapeau","text":"The term \u201csingle source drug or biological\u201d means\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a biological; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" a drug which is not a multiple source drug and 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Exception from pharmaceutical equivalence and bioequivalence requirement"},{"t":"content","children":[{"t":"p","text":"Subparagraph (C)(ii) shall not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in subparagraph (C)(i), in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent, as defined in subparagraph (F).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/F","children":[{"t":"num","text":"(F)"},{"t":"heading","text":"Determination of pharmaceutical equivalence and bioequivalence"},{"t":"chapeau","text":"For purposes of this paragraph\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/F/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" 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","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/c/6/F/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/G","children":[{"t":"num","text":"(G)"},{"t":"heading","text":"Inclusion of vaccines"},{"t":"content","children":[{"t":"p","text":"In applying provisions of ","children":[{"t":"ref","text":"section 1396r\u20138 of this title","href":"/us/usc/t42/s1396r\u20138","tail":" under this section, \u201cother than a vaccine\u201d is deemed deleted from "},{"t":"ref","text":"section 1396r\u20138(k)(2)(B) of this title","href":"/us/usc/t42/s1396r\u20138/k/2/B","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/H","children":[{"t":"num","text":"(H)"},{"t":"heading","text":"Biosimilar biological product"},{"t":"content","children":[{"t":"p","text":"The term \u201cbiosimilar biological product\u201d means a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed under ","children":[{"t":"ref","text":"section 262 of this title","href":"/us/usc/t42/s262","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/c/6/I","children":[{"t":"num","text":"(I)"},{"t":"heading","text":"Reference biological product"},{"t":"content","children":[{"t":"p","text":"The term \u201creference biological product\u201d means the biological product licensed under such ","children":[{"t":"ref","text":"section 262 of this title","href":"/us/usc/t42/s262","tail":" that is referred to in the application described in subparagraph (H) of the biosimilar biological product."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Monitoring of market prices"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The Inspector General of the Department of Health and Human Services shall conduct studies, which may include surveys, to determine the widely available market prices of drugs and biologicals to which this section applies, as the Inspector General, in consultation with the Secretary, determines to be appropriate.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Comparison of prices"},{"t":"chapeau","text":"Based upon such studies and other data for drugs and biologicals, the Inspector General shall compare the average sales price under this section for drugs and biologicals with\u2014"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the widely available market price for such drugs and biologicals (if any); and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the average manufacturer price (as determined under ","children":[{"t":"ref","text":"section 1396r\u20138(k)(1) of this title","href":"/us/usc/t42/s1396r\u20138/k/1","tail":") for such drugs and biologicals."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/d/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Limitation on average sales price"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The Secretary may disregard the average sales price for a drug or biological that exceeds the widely available market price or the average manufacturer price for such drug or biological by the applicable threshold percentage (as defined in subparagraph (B)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Applicable threshold percentage defined"},{"t":"chapeau","text":"In this paragraph, the term \u201capplicable threshold percentage\u201d means\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" in 2005, in the case of an average sales price for a drug or biological that exceeds widely available market price or the average manufacturer price, 5 percent; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" in 2006 and subsequent years, the percentage applied under this subparagraph subject to such adjustment as the Secretary may specify for the widely available market price or the average manufacturer price, or both.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/3/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Authority to adjust average sales price"},{"t":"chapeau","text":"If the Inspector General finds that the average sales price for a drug or biological exceeds such widely available market price or average manufacturer price for such drug or biological by the applicable threshold percentage, the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this subparagraph) and the Secretary shall, effective as of the next quarter, substitute for the amount of payment otherwise determined under this section for such drug or biological the lesser of\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/3/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the widely available market price for the drug or biological (if any); or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/3/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" 103 percent of the average manufacturer price (as determined under ","children":[{"t":"ref","text":"section 1396r\u20138(k)(1) of this title","href":"/us/usc/t42/s1396r\u20138/k/1","tail":") for the drug or biological."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/d/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Civil money penalty"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Misrepresentation"},{"t":"content","children":[{"t":"p","text":"If the Secretary determines that a manufacturer has made a misrepresentation in the reporting of the manufacturer\u2019s average sales price for a drug or biological, the Secretary may apply a civil money penalty in an amount of up to $10,000 for each such price misrepresentation and for each day in which such price misrepresentation was applied.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Failure to provide timely information"},{"t":"content","children":[{"t":"p","text":"If the Secretary determines that a manufacturer described in subsection (f)(2) has failed to report on information described in ","children":[{"t":"ref","text":"section 1396r\u20138(b)(3)(A)(iii) of this title","href":"/us/usc/t42/s1396r\u20138/b/3/A/iii","tail":" with respect to a drug or biological in accordance with such subsection, the Secretary shall apply a civil money penalty in an amount of $10,000 for each day the manufacturer has failed to report such information and such amount shall be paid to the Treasury."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"False information"},{"t":"content","children":[{"t":"p","text":"Any manufacturer required to submit information under subsection (f)(2) that knowingly provides false 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/4/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Increasing oversight and enforcement"},{"t":"chapeau","text":"For calendar quarters beginning on or after ","children":[{"t":"text","text":"January 1, 2022","tail":", "},{"t":"ref","text":"section 1396r\u20138(b)(3)(C)(iv) of this title","href":"/us/usc/t42/s1396r\u20138/b/3/C/iv","tail":" shall be applied as if\u2014"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/4/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" each reference to \u201cunder this subparagraph and subsection (c)(4)(B)(ii)(III)\u201d were a reference to \u201cunder this subparagraph, subsection (c)(4)(B)(ii)(III), and subparagraphs (A), (B), and (C) of ","children":[{"t":"ref","text":"section 1395w\u20133a(d)(4) of this title","href":"/us/usc/t42/s1395w\u20133a/d/4","tail":"\u201d; and"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/4/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the reference to \u201cactivities related to the oversight and enforcement of this section and agreements under this section\u201d were a reference to \u201cactivities related to the oversight and enforcement of this section and under subsection (f)(2) of ","children":[{"t":"ref","text":"section 1395w\u20133a of this title","href":"/us/usc/t42/s1395w\u20133a","tail":" and subparagraphs (A), (B), and (C) of this sub"},{"t":"ref","text":"section 1395w\u20133a(d)(4) of this title","href":"/us/usc/t42/s1395w\u20133a/d/4","tail":" and, if applicable, agreements under this section\u201d."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/4/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Procedures"},{"t":"content","children":[{"t":"p","text":"The provisions of ","children":[{"t":"ref","text":"section 1320a\u20137a of this title","href":"/us/usc/t42/s1320a\u20137a","tail":" (other than subsections (a) and (b)) shall apply to civil money penalties under subparagraph (A), (B), or (C) in the same manner as they apply to a penalty or proceeding under "},{"t":"ref","text":"section 1320a\u20137a(a) of this title","href":"/us/usc/t42/s1320a\u20137a/a","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/d/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Widely available market price"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/5/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"In this subsection, the term \u201cwidely available market price\u201d means the price that a prudent physician or supplier would pay for the drug or biological. In determining such price, the Inspector General shall take into account the discounts, rebates, and other price concessions routinely made available to such prudent physicians or suppliers for such drugs or biologicals.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/d/5/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Considerations"},{"t":"chapeau","text":"In determining the price under subparagraph (A), the Inspector General shall consider information from one or more of the following sources:"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" Manufacturers.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" Wholesalers.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" Distributors.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" Physician supply houses.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/v","children":[{"t":"num","text":"(v)"},{"t":"content","text":" Specialty pharmacies.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/vi","children":[{"t":"num","text":"(vi)"},{"t":"content","text":" Group purchasing arrangements.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/vii","children":[{"t":"num","text":"(vii)"},{"t":"content","text":" Surveys of physicians.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/viii","children":[{"t":"num","text":"(viii)"},{"t":"content","text":" Surveys of suppliers.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/ix","children":[{"t":"num","text":"(ix)"},{"t":"content","text":" Information on such market prices from insurers.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/d/5/B/x","children":[{"t":"num","text":"(x)"},{"t":"content","text":" Information on such market prices from private health plans.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Authority to use alternative payment in response to public health emergency"},{"t":"content","children":[{"t":"p","text":"In the case of a public health emergency under ","children":[{"t":"ref","text":"section 247d of this title","href":"/us/usc/t42/s247d","tail":" in which there is a documented inability to access drugs and biologicals, and a concomitant increase in the price,"},{"t":"ref","text":"1"},{"t":"num","text":"1","tail":"\u202fSo in original. The comma probably should not appear."},{"t":"text","text":"\u202fSo in original. The comma probably should not appear.","tail":" of a drug or biological which is not reflected in the manufacturer\u2019s average sales price for one or more quarters, the Secretary may use the wholesale acquisition cost (or other reasonable measure of drug or biological price) instead of the manufacturer\u2019s average sales price for such quarters and for subsequent quarters until the price and availability of the drug or biological has stabilized and is substantially reflected in the applicable manufacturer\u2019s average sales price."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Quarterly report on average sales price"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"For requirements for reporting the manufacturer\u2019s average sales price (and, if required to make payment, the manufacturer\u2019s wholesale acquisition cost) for the drug or biological under this section, see ","children":[{"t":"ref","text":"section 1396r\u20138(b)(3) of this title","href":"/us/usc/t42/s1396r\u20138/b/3","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Manufacturers without a rebate agreement under subchapter xix"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/f/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"If the manufacturer of a drug or biological described in subparagraph (C), (E), or (G) of section 1395u(","children":[{"t":"text","text":"o","tail":")(1) of this title or in "},{"t":"ref","text":"section 1395rr(b)(14)(B) of this title","href":"/us/usc/t42/s1395rr/b/14/B","tail":" that is payable under this part has not entered into and does not have in effect a rebate agreement described in subsection (b) of "},{"t":"ref","text":"section 1396r\u20138 of this title","href":"/us/usc/t42/s1396r\u20138","tail":", for calendar quarters beginning on "},{"t":"text","text":"January 1, 2022","tail":", such manufacturer shall report to the Secretary the information described in subsection (b)(3)(A)(iii) of such "},{"t":"ref","text":"section 1396r\u20138 of this title","href":"/us/usc/t42/s1396r\u20138","tail":" with respect to such drug or biological in a time and manner specified by the Secretary. For purposes of applying this paragraph, a drug or biological described in the previous sentence includes items, services, supplies, and products that are payable under this part as a drug or biological."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/f/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Audit"},{"t":"content","children":[{"t":"p","text":"Information reported under subparagraph (A) is subject to audit by the Inspector General of the Department of Health and Human Services.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/f/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Verification"},{"t":"content","children":[{"t":"p","text":"The Secretary may survey wholesalers and manufacturers that directly distribute drugs or biologicals described in subparagraph (A), when necessary, to verify manufacturer prices and manufacturer\u2019s 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 such a drug or biological 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 ","children":[{"t":"ref","text":"section 1320a\u20137a of this title","href":"/us/usc/t42/s1320a\u20137a","tail":" (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 "},{"t":"ref","text":"section 1320a\u20137a(a) of this title","href":"/us/usc/t42/s1320a\u20137a/a","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/f/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Confidentiality"},{"t":"chapeau","text":"Notwithstanding any other provision of law, information disclosed by manufacturers or wholesalers under this paragraph (other than the wholesale acquisition cost for purposes of carrying out this section) is confidential and shall not be disclosed by the Secretary in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs or biologicals by such manufacturer or wholesaler, except\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/f/2/D/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" as the Secretary determines to be necessary to carry out this section (including the determination and implementation of the payment amount), or to carry out ","children":[{"t":"ref","text":"section 1320a\u20137b of this title","href":"/us/usc/t42/s1320a\u20137b","tail":";"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/f/2/D/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" to permit the Comptroller General of the United States to review the information provided;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/f/2/D/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" to permit the Director of the Congressional Budget Office to review the information provided;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/f/2/D/iv","children":[{"t":"num","text":"(iv)"},{"t":"content","text":" to permit the Medicare Payment Advisory Commission to review the information provided; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/f/2/D/v","children":[{"t":"num","text":"(v)"},{"t":"content","text":" to permit the Medicaid and CHIP Payment and Access Commission to review the information provided.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Payment adjustment for certain drugs for which there is a self-administered NDC"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/g/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"OIG studies"},{"t":"content","children":[{"t":"p","text":"The Inspector General of the Department of Health and Human Services shall conduct periodic studies to identify National Drug Codes for drug or biological products that are self-administered for which payment may not be made under this part because such products are not covered pursuant to ","children":[{"t":"ref","text":"section 1395x(s)(2) of this title","href":"/us/usc/t42/s1395x/s/2","tail":" and which the Inspector General determines (based on the same or similar methodologies to the methodologies used in the final recommendation followup report of the Inspector General described in paragraph (3) or in the November 2017 final report of the Inspector General entitled \u201cExcluding Noncovered Versions When Setting Payment for Two Part B Drugs Would Have Resulted in Lower Drug Costs for Medicare and its Beneficiaries\u201d) should be excluded from the determination of the payment amount under this section."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/g/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Payment adjustment"},{"t":"chapeau","text":"If the Inspector General identifies a National Drug Code for a drug or biological product under paragraph (1), the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this paragraph) and the Secretary shall, to the extent the Secretary deems appropriate, apply as the amount of payment under this section for the applicable billing and payment code the lesser of\u2014"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/g/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such product so identified under paragraph (1) were excluded from such determination; or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/g/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/g/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Application to certain identified products"},{"t":"chapeau","text":"In the case of a National Drug Code for a drug or biological product that is self-administered for which payment is not made under this part because such product is not covered pursuant to ","children":[{"t":"ref","text":"section 1395x(s)(2) of this title","href":"/us/usc/t42/s1395x/s/2","tail":" that was identified by the Inspector General of the Department of Health and Human Services in the final recommendation followup report of the Inspector General published July 2020, entitled Loophole in Drug Payment Rule Continues To Cost Medicare and Beneficiaries Hundreds of Millions of Dollars, beginning "},{"t":"text","text":"July 1, 2021","tail":", the amount of payment under this section for the applicable billing and payment code shall be the lesser of\u2014"}]},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/g/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such drug or biological products so identified were excluded from such determination; or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/g/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Refund for certain discarded single-dose container or single-use package drugs"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Secretarial provision of information"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/1/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For each calendar quarter beginning on or after ","children":[{"t":"text","text":"January 1, 2023","tail":", the Secretary shall, with respect to a refundable single-dose container or single-use package drug (as defined in paragraph (8)), report to each manufacturer (as defined in subsection (c)(6)(A)) of such refundable single-dose container or single-use package drug the following for the calendar quarter:"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" Subject to subparagraph (C), information on the total number of units of the billing and payment code of such drug, if any, that were discarded during such quarter, as determined using a mechanism such as the JW modifier used as of ","children":[{"t":"text","text":"November 15, 2021","tail":" (or any such successor modifier that includes such data as determined appropriate by the Secretary)."}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" The refund amount that the manufacturer is liable for pursuant to paragraph (3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/1/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Determination of discarded amounts"},{"t":"content","children":[{"t":"p","text":"For purposes of subparagraph (A)(i), with respect to a refundable single-dose container or single-use package drug furnished during a quarter, the amount of such drug that was discarded shall be determined based on the amount of such drug that was unused and discarded for each drug on the date of service.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/1/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Exclusion of units of packaged drugs"},{"t":"content","children":[{"t":"p","text":"The total number of units of the billing and payment code of a refundable single-dose container or single-use package drug of a manufacturer furnished during a calendar quarter for purposes of subparagraph (A)(i), and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph (3)(A)(ii), shall not include such units that are packaged into the payment amount for an item or service and are not separately payable.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Manufacturer requirement"},{"t":"content","children":[{"t":"p","text":"For each calendar quarter beginning on or after ","children":[{"t":"text","text":"January 1, 2023","tail":", the manufacturer of a refundable single-dose container or single-use package drug shall, for such drug, provide to the Secretary a refund that is equal to the amount specified in paragraph (3) for such drug for such quarter."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Refund amount"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The amount of the refund specified in this paragraph is, with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after ","children":[{"t":"text","text":"January 1, 2023","tail":", an amount equal to the estimated amount (if any) by which\u2014"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" the product of\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/3/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the total number of units of the billing and payment code for such drug that were discarded during such quarter (as determined under paragraph (1)); and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/3/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"num","text":"(aa)"},{"t":"content","text":" in the case of a refundable single-dose container or single-use package drug that is a single source drug or biological, the amount of payment determined for such drug or biological under subsection (b)(1)(B) for such quarter; or"},{"t":"text","text":"\n","tail":"\n"},{"t":"num","text":"(bb)"},{"t":"content","text":" in the case of a refundable single-dose container or single-use package drug that is a biosimilar biological product, the amount of payment determined for such product under subsection (b)(1)(C) for such quarter; exceeds"},{"t":"text","text":"\n","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" an amount equal to the applicable percentage (as defined in subparagraph (B)) of the estimated total allowed charges for such drug under this part during the quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Applicable percentage defined"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of subparagraph (A)(ii), the term \u201capplicable percentage\u201d means\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/3/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" subject to subclause (II), 10 percent; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/3/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" if applicable, in the case of a refundable single-dose container or single-use package drug described in clause (ii), a percentage specified by the Secretary pursuant to such clause.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Treatment of drugs that have unique circumstances"},{"t":"content","children":[{"t":"p","text":"In the case of a refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product as that described in paragraph (8)(B)(ii), the Secretary, through notice and comment rulemaking, may increase the applicable percentage otherwise applicable under clause (i)(I) as determined appropriate by the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Frequency"},{"t":"content","children":[{"t":"p","text":"Amounts required to be refunded pursuant to paragraph (2) shall be paid in regular intervals (as determined appropriate by the Secretary).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Refund deposits"},{"t":"content","children":[{"t":"p","text":"Amounts paid as refunds pursuant to paragraph (2) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under ","children":[{"t":"ref","text":"section 1395t of this title","href":"/us/usc/t42/s1395t","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Enforcement"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Audits"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Manufacturer audits"},{"t":"content","children":[{"t":"p","text":"Each manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under this subsection shall be subject to periodic audit with respect to such drug and such refunds by the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Provider audits"},{"t":"content","children":[{"t":"p","text":"The Secretary shall conduct periodic audits of claims submitted under this part with respect to refundable single-dose container or single-use package drugs in accordance with the authority under section 1395","children":[{"t":"text","text":"l","tail":"(e) of this title to ensure compliance with the requirements applicable under this subsection."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Civil money penalty"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/6/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The Secretary shall impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who has failed to comply with the requirement under paragraph (2) for such drug for a calendar quarter in an amount equal to the sum of\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/6/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/h/6/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" 25 percent of such amount.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/6/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Application"},{"t":"content","children":[{"t":"p","text":"The provisions of ","children":[{"t":"ref","text":"section 1320a\u20137a of this title","href":"/us/usc/t42/s1320a\u20137a","tail":" (other than subsections (a) and (b)) shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply to a penalty or proceeding under "},{"t":"ref","text":"section 1320a\u20137a(a) of this title","href":"/us/usc/t42/s1320a\u20137a/a","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Implementation"},{"t":"content","children":[{"t":"p","text":"The Secretary shall implement this subsection through notice and comment rulemaking.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Definition of refundable single-dose container or single-use package drug"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/8/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as provided in subparagraph (B), in this subsection, the term \u201crefundable single-dose container or single-use package drug\u201d means a single source drug or biological (as defined in subsection (c)(6)(D)) or a biosimilar biological product (as defined in subsection (c)(6)(H)) for which payment is made under this part and that is furnished from a single-dose container or single-use package.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/h/8/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Exclusions"},{"t":"chapeau","text":"The term \u201crefundable single-dose container or single-use package drug\u201d does not include\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/8/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a drug or biological that is either a radiopharmaceutical or an imaging agent;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/8/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" a drug or biological approved by the Food and Drug Administration for which dosage and administration instructions included in the labeling require filtration during the drug preparation process, prior to dilution and administration, and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/h/8/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" a drug or biological approved by the Food and Drug Administration on or after ","children":[{"t":"text","text":"November 15, 2021","tail":", and with respect to which payment has been made under this part for fewer than 18 months."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/h/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Report to Congress"},{"t":"content","children":[{"t":"p","text":"Not later than 3 years after ","children":[{"t":"text","text":"November 15, 2021","tail":", the Office of the Inspector General, after consultation with the Centers for Medicare & Medicaid Services and the Food and Drug Administration, shall submit to the Committee on Finance of the Senate and the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives, a report on any impact this section is reported to have on the licensure, market entry, market retention, or marketing of biosimilar biological products. Such report shall be updated periodically at the direction of the Committee on Finance of the Senate and the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Rebate by manufacturers for single source drugs and biologicals with prices increasing faster than inflation"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Requirements"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/1/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Secretarial provision of information"},{"t":"chapeau","text":"Not later than 6 months after the end of each calendar quarter beginning on or after ","children":[{"t":"text","text":"January 1, 2023","tail":", the Secretary shall, for each part B rebatable drug, report to each manufacturer of such part B rebatable drug the following for such calendar quarter:"}]},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" Information on the total number of units of the billing and payment code described in subparagraph (A)(i) of paragraph (3) with respect to such drug and calendar quarter.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" Information on the amount (if any) of the excess average sales price increase described in subparagraph (A)(ii) of such paragraph for such drug and calendar quarter.","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/1/A/iii","children":[{"t":"num","text":"(iii)"},{"t":"content","text":" The rebate amount specified under such paragraph for such part B rebatable drug and calendar quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/1/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Manufacturer requirement"},{"t":"content","children":[{"t":"p","text":"For each calendar quarter beginning on or after ","children":[{"t":"text","text":"January 1, 2023","tail":", the manufacturer of a part B rebatable drug shall, for such drug, not later than 30 days after the date of receipt from the Secretary of the information described in subparagraph (A) for such calendar quarter, provide to the Secretary a rebate that is equal to the amount specified in paragraph (3) for such drug for such calendar quarter."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/1/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Transition rule for reporting"},{"t":"content","children":[{"t":"p","text":"The Secretary may, for each part B rebatable drug, delay the timeframe for reporting the information described in subparagraph (A) for calendar quarters beginning in 2023 and 2024 until not later than ","children":[{"t":"text","text":"September 30, 2025","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Part B rebatable drug defined"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In this subsection, the term \u201cpart B rebatable drug\u201d means a single source drug or biological (as defined in subparagraph (D) of subsection (c)(6)), including a biosimilar biological product (as defined in subparagraph (H) of such subsection) but excluding a qualifying biosimilar biological product (as defined in subsection (b)(8)(B)(iii)), for which payment is made under this part, except such term shall not include such a drug or biological\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" if, as determined by the Secretary, the average total allowed charges for such drug or biological under this part for a year per individual that uses such a drug or biological are less than, subject to subparagraph (B), $100; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" that is a vaccine described in subparagraph (A) or (B) of ","children":[{"t":"ref","text":"section 1395x(s)(10) of this title","href":"/us/usc/t42/s1395x/s/10","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Increase"},{"t":"chapeau","text":"The dollar amount applied under subparagraph (A)(i)\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/2/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" for 2024, shall be the dollar amount specified under such subparagraph for 2023, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/2/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" for a subsequent year, shall be the dollar amount specified in this clause (or clause (i)) for the previous year (without application of subparagraph (C)), increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Rounding"},{"t":"content","children":[{"t":"p","text":"Any dollar amount determined under subparagraph (B) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Rebate amount"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of paragraph (1), the amount specified in this paragraph for a part B rebatable drug assigned to a billing and payment code for a calendar quarter is, subject to subparagraphs (B) and (G) and paragraph (4), the estimated amount equal to the product of\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the total number of units determined under subparagraph (B) for the billing and payment code of such drug; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" the amount (if any) by which\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/i/3/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"chapeau","text":" the amount equal to\u2014"},{"t":"num","text":"(aa)"},{"t":"content","text":" in the case of a part B rebatable drug described in paragraph (1)(B) of subsection (b), 106 percent of the amount determined under paragraph (4) of such section\u202f","children":[{"t":"ref","text":"2"},{"t":"num","text":"2","tail":"\u202fSo in original. Probably should be \u201csubsection\u201d."},{"t":"text","text":"\u202fSo in original. Probably should be \u201csubsection\u201d.","tail":" for such drug during the calendar quarter; or"}]},{"t":"text","text":"\n","tail":"\n"},{"t":"num","text":"(bb)"},{"t":"content","text":" in the case of a part B rebatable drug described in paragraph (1)(C) of such subsection, the payment amount under such paragraph for such drug during the calendar quarter; exceeds"},{"t":"text","text":"\n","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/i/3/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the inflation-adjusted payment amount determined under subparagraph (C) for such part B rebatable drug during the calendar quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Total number of units"},{"t":"chapeau","text":"For purposes of subparagraph (A)(i), the total number of units for the billing and payment code with respect to a part B rebatable drug furnished during a calendar quarter described in subparagraph (A) is equal to\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the number of units for the billing and payment code of such drug furnished during such calendar quarter, minus","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" the number of units for such billing and payment code of such drug furnished during such calendar quarter\u2014"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/i/3/B/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" with respect to which the manufacturer provides a discount under the program under ","children":[{"t":"ref","text":"section 256b of this title","href":"/us/usc/t42/s256b","tail":" or a rebate under "},{"t":"ref","text":"section 1396r\u20138 of this title","href":"/us/usc/t42/s1396r\u20138","tail":"; or"}],"tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t42/s1395w\u20133a/i/3/B/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" that are packaged into the payment amount for an item or service and are not separately payable.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Determination of inflation-adjusted payment amount"},{"t":"chapeau","text":"The inflation-adjusted payment amount determined under this subparagraph for a part B rebatable drug for a calendar quarter is\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter (as defined in subparagraph (D)); increased by","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the percentage by which the rebate period CPI\u2013U (as defined in subparagraph (F)) for the calendar quarter exceeds the benchmark period CPI\u2013U (as defined in subparagraph (E)).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Payment amount benchmark quarter"},{"t":"content","children":[{"t":"p","text":"The term \u201cpayment amount benchmark quarter\u201d means the calendar quarter beginning ","children":[{"t":"text","text":"July 1, 2021","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/E","children":[{"t":"num","text":"(E)"},{"t":"heading","text":"Benchmark period CPI\u2013U"},{"t":"content","children":[{"t":"p","text":"The term \u201cbenchmark period CPI\u2013U\u201d means the consumer price index for all urban consumers (United States city average) for January 2021.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/F","children":[{"t":"num","text":"(F)"},{"t":"heading","text":"Rebate period CPI\u2013U"},{"t":"content","children":[{"t":"p","text":"The term \u201crebate period CPI\u2013U\u201d means, with respect to a calendar quarter described in subparagraph (C), the greater of the benchmark period CPI\u2013U and the consumer price index for all urban consumers (United States city average) for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/3/G","children":[{"t":"num","text":"(G)"},{"t":"heading","text":"Reduction or waiver for shortages and severe supply chain disruptions"},{"t":"chapeau","text":"The Secretary shall reduce or waive the amount under subparagraph (A) with respect to a part B rebatable drug and a calendar quarter\u2014"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/G/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" in the case of a part B rebatable drug that is described as currently in shortage on the shortage list in effect under ","children":[{"t":"ref","text":"section 356e of title 21","href":"/us/usc/t21/s356e","tail":" at any point during the calendar quarter; or"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t42/s1395w\u20133a/i/3/G/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" in the case of a biosimilar biological product, when the Secretary determines there is a severe supply chain disruption during the calendar quarter, such as that caused by a natural disaster or other unique or unexpected event.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Special treatment of certain drugs and exemption"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Subsequently approved drugs"},{"t":"content","children":[{"t":"p","text":"In the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after ","children":[{"t":"text","text":"December 1, 2020","tail":", clause (i) of paragraph (3)(C) shall be applied as if the term \u201cpayment amount benchmark quarter\u201d were defined under paragraph (3)(D) as the third full calendar quarter after the day on which the drug was first marketed and clause (ii) of paragraph (3)(C) shall be applied as if the term \u201cbenchmark period CPI\u2013U\u201d were defined under paragraph (3)(E) as if the reference to \u201cJanuary 2021\u201d under such paragraph were a reference to \u201cthe first month of the first full calendar quarter after the day on which the drug was first marketed\u201d."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Timeline for provision of rebates for subsequently approved drugs"},{"t":"content","children":[{"t":"p","text":"In the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after ","children":[{"t":"text","text":"December 1, 2020","tail":", paragraph (1)(B) shall be applied as if the reference to \u201c"},{"t":"text","text":"January 1, 2023","tail":"\u201d under such paragraph were a reference to \u201cthe later of the 6th full calendar quarter after the day on which the drug was first marketed or "},{"t":"text","text":"January 1, 2023","tail":"\u201d."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Selected drugs"},{"t":"content","children":[{"t":"p","text":"In the case of a part B rebatable drug that is a selected drug (as defined in ","children":[{"t":"ref","text":"section 1320f\u20131(c) of this title","href":"/us/usc/t42/s1320f\u20131/c","tail":") with respect to a price applicability period (as defined in "},{"t":"ref","text":"section 1320f(b)(2) of this title","href":"/us/usc/t42/s1320f/b/2","tail":"), in the case such drug is no longer considered to be a selected drug under "},{"t":"ref","text":"section 1320f\u20131(c) of this title","href":"/us/usc/t42/s1320f\u20131/c","tail":", for each applicable period (as defined under subsection (g)(7))\u202f"},{"t":"ref","text":"3"},{"t":"num","text":"3","tail":"\u202fSee References in Text note below."},{"t":"text","text":"\u202fSee References in Text note below.","tail":" beginning after the price applicability period with respect to such drug, clause (i) of paragraph (3)(C) shall be applied as if the term \u201cpayment amount benchmark quarter\u201d were defined under paragraph (3)(D) as the calendar quarter beginning January 1 of the last year during such price applicability period with respect to such selected drug and clause (ii) of paragraph (3)(C) shall be applied as if the term \u201cbenchmark period CPI\u2013U\u201d were defined under paragraph (3)(E) as if the reference to \u201cJanuary 2021\u201d under such paragraph were a reference to \u201cthe July of the year preceding such last year\u201d."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Application to beneficiary coinsurance"},{"t":"chapeau","text":"In the case of a part B rebatable drug furnished on or after ","children":[{"t":"text","text":"April 1, 2023","tail":", if the payment amount described in paragraph (3)(A)(ii)(I) (or, in the case of a part B rebatable drug that is a selected drug (as defined in "},{"t":"ref","text":"section 1320f\u20131(c) of this title","href":"/us/usc/t42/s1320f\u20131/c","tail":"), the payment amount described in subsection (b)(1)(B) for such drug) for a calendar quarter exceeds the inflation adjusted payment for such quarter\u2014"}]},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" in computing the amount of any coinsurance applicable under this part to an individual to whom such drug is furnished, the computation of such coinsurance shall be equal to 20 percent of the inflation-adjusted payment amount determined under paragraph (3)(C) for such part B rebatable drug; and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the amount of such coinsurance for such calendar quarter, as computed under subparagraph (A), shall be applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply under subparagraphs (B) or (C) of subsection (b)(1).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Rebate deposits"},{"t":"content","children":[{"t":"p","text":"Amounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under ","children":[{"t":"ref","text":"section 1395t of this title","href":"/us/usc/t42/s1395t","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Civil money penalty"},{"t":"content","children":[{"t":"p","text":"If a manufacturer of a part B rebatable drug has failed to comply with the requirements under paragraph (1)(B) for such drug for a calendar quarter, the manufacturer shall be subject to, in accordance with a process established by the Secretary pursuant to regulations, a civil money penalty in an amount equal to at least 125 percent of the amount specified in paragraph (3) for such drug for such calendar quarter. The provisions of ","children":[{"t":"ref","text":"section 1320a\u20137a of this title","href":"/us/usc/t42/s1320a\u20137a","tail":" (other than subsections (a) (with respect to amounts of penalties or additional assessments) and (b)) shall apply to a civil money penalty under this paragraph in the same manner as such provisions apply to a penalty or proceeding under "},{"t":"ref","text":"section 1320a\u20137a(a) of this title","href":"/us/usc/t42/s1320a\u20137a/a","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/i/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Limitation on administrative or judicial review"},{"t":"chapeau","text":"There shall be no administrative or judicial review of any of the following:"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/8/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" The determination of units under this subsection.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/8/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" The determination of whether a drug is a part B rebatable drug under this subsection.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/8/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" The calculation of the rebate amount under this subsection.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/8/D","children":[{"t":"num","text":"(D)"},{"t":"content","text":" The computation of coinsurance under paragraph (5) of this subsection.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t42/s1395w\u20133a/i/8/E","children":[{"t":"num","text":"(E)"},{"t":"content","text":" The computation of amounts paid under section 1395","children":[{"t":"text","text":"l","tail":"(a)(1)(EE) of this title."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t42/s1395w\u20133a/j","children":[{"t":"num","text":"(j)"},{"t":"heading","text":"Judicial review"},{"t":"chapeau","text":"There shall be no administrative or judicial review under ","children":[{"t":"ref","text":"section 1395ff of this title","href":"/us/usc/t42/s1395ff","tail":", section 1395"},{"t":"text","text":"oo","tail":" of this title, or otherwise, of\u2014"}]},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/j/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" determinations of payment amounts under this section, including the assignment of National Drug Codes to billing and payment codes;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/j/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" the identification of units (and package size) under subsection (b)(2);","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/j/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" the method to allocate rebates, chargebacks, and other price concessions to a quarter if specified by the Secretary;","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/j/4","children":[{"t":"num","text":"(4)"},{"t":"content","text":" the manufacturer\u2019s average sales price when it is used for the determination of a payment amount under this section; and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t42/s1395w\u20133a/j/5","children":[{"t":"num","text":"(5)"},{"t":"content","text":" the disclosure of the average manufacturer price by reason of an adjustment under subsection (d)(3)(C) or (e).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}