§ 1396r–8. Payment for covered outpatient drugs

The Board shall re-evaluate interventions after an appropriate period of time to determine if the intervention improved the quality of drug therapy, to evaluate the success of the interventions and make modifications as necessary.

(i) Retrospective DUR as defined in section ^7 (2)(B).

(ii) Application of standards as defined in section ^7 (2)(C).

(iii) Ongoing interventions for physicians and pharmacists, targeted toward therapy problems or individuals identified in the course of retrospective drug use reviews performed under this subsection. Intervention programs shall include, in appropriate instances, at least:

(I) information dissemination sufficient to ensure the ready availability to physicians and pharmacists in the State of information concerning its duties, powers, and basis for its standards;

(II) written, oral, or electronic reminders containing patient-specific or drug-specific (or both) information and suggested changes in prescribing or dispensing practices, communicated in a manner designed to ensure the privacy of patient-related information;

(III) use of face-to-face discussions between health care professionals who are experts in rational drug therapy and selected prescribers and pharmacists who have been targeted for educational intervention, including discussion of optimal prescribing, dispensing, or pharmacy care practices, and follow-up face-to-face discussions; and

(IV) intensified review or monitoring of selected prescribers or dispensers.

(D) Annual report Each State shall require the DUR Board to prepare a report on an annual basis. The State shall submit a report on an annual basis to the Secretary which shall include a description of the activities of the Board, including the nature and scope of the prospective and retrospective drug use review programs, a summary of the interventions used, an assessment of the impact of these educational interventions on quality of care, and an estimate of the cost savings generated as a result of such program. The Secretary shall utilize such report in evaluating the effectiveness of each State’s drug use review program.

(h) Electronic claims management

(1) In general In accordance with chapter 35 of title 44 (relating to coordination of Federal information policy), the Secretary shall encourage each State agency to establish, as its principal means of processing claims for covered outpatient drugs under this subchapter, a point-of-sale electronic claims management system, for the purpose of performing on-line, real time eligibility verifications, claims data capture, adjudication of claims, and assisting pharmacists (and other authorized persons) in applying for and receiving payment.

(2) Encouragement In order to carry out paragraph (1)—

(A) for calendar quarters during fiscal years 1991 and 1992, expenditures under the State plan attributable to development of a system described in paragraph (1) shall receive Federal financial participation under section 1396b(a)(3)(A)(i) of this title (at a matching rate of 90 percent) if the State acquires, through applicable competitive procurement process in the State, the most cost-effective telecommunications network and automatic data processing services and equipment; and

(B) the Secretary may permit, in the procurement described in subparagraph (A) in the application of part 433 of title 42, Code of Federal Regulations, and parts 95, 205, and 307 of title 45, Code of Federal Regulations, the substitution of the State’s request for proposal in competitive procurement for advance planning and implementation documents otherwise required.

(i) Omitted

(j) Exemption of organized health care settings

(1) Covered outpatient drugs are not subject to the requirements of this section if such drugs are—

(A) dispensed by health maintenance organizations, including Medicaid managed care organizations that contract under section 1396b(m) of this title; and

(B) subject to discounts under section 256b of this title.

(2) The State plan shall provide that a hospital (providing medical assistance under such plan) that dispenses covered outpatient drugs using drug formulary systems, and bills the plan no more than the hospital’s purchasing costs for covered outpatient drugs (as determined under the State plan) shall not be subject to the requirements of this section.

(3) Nothing in this subsection shall be construed as providing that amounts for covered outpatient drugs paid by the institutions described in this subsection should not be taken into account for purposes of determining the best price as described in subsection (c).

(k) Definitions In this section—

(1) Average manufacturer price

(A) In general Subject to subparagraph (B), the term “average manufacturer price” means, with respect to a covered outpatient drug of a manufacturer for a rebate period, the average price paid to the manufacturer for the drug in the United States by—

(i) wholesalers for drugs distributed to retail community pharmacies; and

(ii) retail community pharmacies that purchase drugs directly from the manufacturer.

(B) Exclusion of customary prompt pay discounts and other payments

(i) In general The average manufacturer price for a covered outpatient drug shall exclude—

(I) customary prompt pay discounts extended to wholesalers;

(II) bona fide service fees paid by manufacturers to wholesalers or retail community pharmacies, including (but not limited to) distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs and patient education programs);

(III) reimbursement by manufacturers for recalled, damaged, expired, or otherwise unsalable returned goods, including (but not limited to) reimbursement for the cost of the goods and any reimbursement of costs associated with return goods handling and processing, reverse logistics, and drug destruction;

(IV) payments received from, and rebates or discounts provided to, pharmacy benefit managers, managed care organizations, health maintenance organizations, insurers, hospitals, clinics, mail order pharmacies, long term care providers, manufacturers, or any other entity that does not conduct business as a wholesaler or a retail community pharmacy, unless the drug is an inhalation, infusion, instilled, implanted, or injectable drug that is not generally dispensed through a retail community pharmacy ^3

(V) discounts provided by manufacturers under section 1395w–114a of this title or under section 1395w–114c of this title;

(VI) any reduction in price paid during the rebate period to the manufacturer for a drug by reason of application of part E of subchapter XI;

(VII) rebates paid by manufacturers under section 1395w–3a(i) of this title; and

(VIII) rebates paid by manufacturers under section 1395w–114b of this title.

(ii) Inclusion of other discounts and payments Notwithstanding clause (i), any other discounts, rebates, payments, or other financial transactions that are received by, paid by, or passed through to, retail community pharmacies shall be included in the average manufacturer price for a covered outpatient drug.

(C) Exclusion of section 505(c) drugs In the case of a manufacturer that approves, allows, or otherwise permits any drug of the manufacturer to be sold under the manufacturer’s new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(c)], such term shall be exclusive of the average price paid for such drug by wholesalers for drugs distributed to retail community pharmacies.

(2) Covered outpatient drug Subject to the exceptions in paragraph (3), the term “covered outpatient drug” means—

(A) of those drugs which are treated as prescribed drugs for purposes of section 1396d(a)(12) of this title, a drug which may be dispensed only upon prescription (except as provided in paragraph (4)), and—

(i) which is approved for safety and effectiveness as a prescription drug under section 505 [21 U.S.C. 355] or 507 ^4 of the Federal Food, Drug, and Cosmetic Act or which is approved under section 505(j) of such Act [21 U.S.C. 355(j)];

(ii)

(I) which was commercially used or sold in the United States before October 10, 1962, or which is identical, similar, or related (within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (II) which has not been the subject of a final determination by the Secretary that it is a “new drug” (within the meaning of section 201(p) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 321(p)]) or an action brought by the Secretary under section 301, 302(a), or 304(a) of such Act [21 U.S.C. 331, 332(a), 334(a)] to enforce section 502(f) or 505(a) of such Act [21 U.S.C. 352(f), 355(a)]; or

(iii)

(I) which is described in section 107(c)(3) of the Drug Amendments of 1962 and for which the Secretary has determined there is a compelling justification for its medical need, or is identical, similar, or related (within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (II) for which the Secretary has not issued a notice of an opportunity for a hearing under section 505(e) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 355(e)] on a proposed order of the Secretary to withdraw approval of an application for such drug under such section because the Secretary has determined that the drug is less than effective for some or all conditions of use prescribed, recommended, or suggested in its labeling; and

(B) a biological product, other than a vaccine which—

(i) may only be dispensed upon prescription,

(ii) is licensed under section 262 of this title, and

(iii) is produced at an establishment licensed under such section to produce such product; and

(C) insulin certified under section 506 ^4 of the Federal Food, Drug, and Cosmetic Act.

(3) Limiting definition The term “covered outpatient drug” does not include any drug, biological product, or insulin provided as part of, or as incident to and in the same setting as, any of the following (and for which payment may be made under this subchapter as part of payment for the following and not as direct reimbursement for the drug):

Such term also does not include any such drug or product for which a National Drug Code number is not required by the Food and Drug Administration or a drug or biological 99 So in original. Probably should be “biological product”. used for a medical indication which is not a medically accepted indication. Any drug, biological product, or insulin excluded from the definition of such term as a result of this paragraph shall be treated as a covered outpatient drug for purposes of determining the best price (as defined in subsection (c)(1)(C)) for such drug, biological product, or insulin.

(A) Inpatient hospital services.

(B) Hospice services.

(C) Dental services, except that drugs for which the State plan authorizes direct reimbursement to the dispensing dentist are covered outpatient drugs.

(D) Physicians’ services.

(E) Outpatient hospital services.

(F) Nursing facility services and services provided by an intermediate care facility for the mentally retarded.

(G) Other laboratory and x-ray services.

(H) Renal dialysis.

(4) Nonprescription drugs If a State plan for medical assistance under this subchapter includes coverage of prescribed drugs as described in section 1396d(a)(12) of this title and permits coverage of drugs which may be sold without a prescription (commonly referred to as “over-the-counter” drugs), if they are prescribed by a physician (or other person authorized to prescribe under State law), such a drug shall be regarded as a covered outpatient drug.

(5) Manufacturer The term “manufacturer” means any entity which is engaged in—

Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law.

(A) the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or

(B) in the packaging, repackaging, labeling, relabeling, or distribution of prescription drug products.

(6) Medically accepted indication The term “medically accepted indication” means any use for a covered outpatient drug which is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.] or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(i).

(7) Multiple source drug; innovator multiple source drug; noninnovator multiple source drug; single source drug

(A) Defined

(i) Multiple source drug The term “multiple source drug” means, with respect to a rebate period, a covered outpatient drug, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4), for which there ^2 at least 1 other drug product which—

(I) is rated as therapeutically equivalent (under the Food and Drug Administration’s most recent publication of “Approved Drug Products with Therapeutic Equivalence Evaluations”),

(II) except as provided in subparagraph (B), is pharmaceutically equivalent and bioequivalent, as defined in subparagraph (C) and as determined by the Food and Drug Administration, and

(III) is sold or marketed in the United States during the period.

(ii) Innovator multiple source drug The term “innovator multiple source drug” means a multiple source drug that is marketed under a new drug application approved by the Food and Drug Administration, unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation)).

(iii) Noninnovator multiple source drug The term “noninnovator multiple source drug” means a multiple source drug that is not an innovator multiple source drug.

(iv) Single source drug The term “single source drug” means a covered outpatient drug, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4), which is produced or distributed under a new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation)). Such term also includes a covered outpatient drug that is a biological product licensed, produced, or distributed under a biologics license application approved by the Food and Drug Administration.

(B) Exception Subparagraph (A)(i)(II) shall not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in subparagraph (A)(i)(I), in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent, as defined in subparagraph (C).

(C) Definitions For purposes of this paragraph—

(i) drug products are pharmaceutically equivalent if the products contain identical amounts of the same active drug ingredient in the same dosage form and meet compendial or other applicable standards of strength, quality, purity, and identity; and

(ii) drugs are bioequivalent if they do not present a known or potential bioequivalence problem, or, if they do present such a problem, they are shown to meet an appropriate standard of bioequivalence.

(8) Rebate period The term “rebate period” means, with respect to an agreement under subsection (a), a calendar quarter or other period specified by the Secretary with respect to the payment of rebates under such agreement.

(9) State agency The term “State agency” means the agency designated under section 1396a(a)(5) of this title to administer or supervise the administration of the State plan for medical assistance.

(10) Retail community pharmacy The term “retail community pharmacy” means an independent pharmacy, a chain pharmacy, a supermarket pharmacy, or a mass merchandiser pharmacy that is licensed as a pharmacy by the State and that dispenses medications to the general public at retail prices. Such term does not include a pharmacy that dispenses prescription medications to patients primarily through the mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or pharmacy benefit managers.

(11) Wholesaler The term “wholesaler” means a drug wholesaler that is engaged in wholesale distribution of prescription drugs to retail community pharmacies, including (but not limited to) repackers, distributors, own-label distributors, private-label distributors, jobbers, brokers, warehouses (including distributor’s warehouses, chain drug warehouses, and wholesale drug warehouses) independent wholesale drug traders, and retail community pharmacies that conduct wholesale distributions.

(Aug. 14, 1935, ch. 531, title XIX, § 1927, as added Pub. L. 101–508, title IV, § 4401(a)(3), Nov. 5, 1990, 104 Stat. 1388–143; amended Pub. L. 102–585, title VI, § 601(a)–(c), Nov. 4, 1992, 106 Stat. 4962–4964; Pub. L. 103–18, § 2(a), Apr. 12, 1993, 107 Stat. 54; Pub. L. 103–66, title XIII, § 13602(a), Aug. 10, 1993, 107 Stat. 613; Pub. L. 105–33, title IV, §§ 4701(b)(2)(A)(x), 4756, Aug. 5, 1997, 111 Stat. 493, 527; Pub. L. 106–113, div. B, § 1000(a)(6) [title VI, §§ 606(a), 608(u)], Nov. 29, 1999, 113 Stat. 1536, 1501A–396, 1501A–398; Pub. L. 108–173, title I, §§ 101(e)(4), (9), 103(e)(1), 105(b), title III, § 303(i)(4), title IX, § 900(e)(1)(K), (L), title X, § 1002, Dec. 8, 2003, 117 Stat. 2151, 2152, 2159, 2166, 2254, 2372, 2431; Pub. L. 109–91, title I, § 104(a), Oct. 20, 2005, 119 Stat. 2092; Pub. L. 109–171, title VI, §§ 6001(a)–(c)(2), (d)–(f)(2), 6002(a), 6003(a), (b), 6004(a), Feb. 8, 2006, 120 Stat. 54–61; Pub. L. 109–432, div. B, title IV, § 405(c)(2)(A)(ii), Dec. 20, 2006, 120 Stat. 3000; Pub. L. 111–8, div. F, title II, § 221(a), Mar. 11, 2009, 123 Stat. 783; Pub. L. 111–148, title II, §§ 2501(a), (b), (c)(2), (d)(1), (e), 2502(a), 2503(a)–(c), title III, § 3301(d)(2), title IV, § 4107(b), Mar. 23, 2010, 124 Stat. 306–310, 312, 468, 560; Pub. L. 111–152, title I, §§ 1101(c), 1206(a), Mar. 30, 2010, 124 Stat. 1039, 1056; Pub. L. 111–226, title II, § 202, Aug. 10, 2010, 124 Stat. 2394; Pub. L. 111–309, title II, § 204(b), Dec. 15, 2010, 124 Stat. 3290; Pub. L. 114–74, title VI, § 602(a), Nov. 2, 2015, 129 Stat. 596; Pub. L. 114–198, title VII, § 705(a), July 22, 2016, 130 Stat. 753; Pub. L. 115–123, div. E, title XII, § 53104(a), Feb. 9, 2018, 132 Stat. 302; Pub. L. 115–271, title I, § 1004(b)(1), Oct. 24, 2018, 132 Stat. 3912; Pub. L. 116–16, § 6(a)(1), (2)(B)–(c), Apr. 18, 2019, 133 Stat. 859, 861, 863; Pub. L. 116–59, div. B, title VI, § 1603(a), (b), Sept. 27, 2019, 133 Stat. 1108; Pub. L. 116–159, div. C, title VI, § 2601(b), Oct. 1, 2020, 134 Stat. 738; Pub. L. 116–260, div. CC, title I, § 112(b), title IV, § 401(c), Dec. 27, 2020, 134 Stat. 2947, 2997; Pub. L. 117–2, title IX, §§ 9811(a)(4)(B), 9816, Mar. 11, 2021, 135 Stat. 210, 216; Pub. L. 117–169, title I, §§ 11001(b)(1)(G)(ii), (2), (3), 11002(b), 11101(c)(2)–(4), 11102(b)(2)–(4), 11201(e)(8), Aug. 16, 2022, 136 Stat. 1853, 1854, 1862, 1870, 1876, 1877, 1892.)

Editorial Notes

References in Text

The Internal Revenue Code of 1986, referred to in subsecs. (a)(3) and (c)(1)(D)(i)(IV)(aa), is classified generally to Title 26, Internal Revenue Code.

The amendments made by subsections (a)(1), (b), (c), and (d) of section 2501 of the Patient Protection and Affordable Care Act, referred to in subsec. (b)(1)(C)(i)(II), mean the amendments made by section 2501(a)(1), (b), (c), and (d) of Pub. L. 111–148, which amended this section and section 1396b of this title.

Section 256b(a)(4) of this title, referred to in subsec. (c)(1)(D)(i)(IV)(bb), was in the original “section 340(B)(a)(4) of the Public Health Service Act”, and was translated as meaning section 340B(a)(4) of the Public Health Service Act, which defines “covered entity”, to reflect the probable intent of Congress.

The Federal Food, Drug, and Cosmetic Act, referred to in subsecs. (d)(4)(C) and (k)(6), is act June 25, 1938, ch. 675, 52 Stat. 1040, which is classified generally to chapter 9 (§ 301 et seq.) of Title 21, Food and Drugs. For complete classification of this Act to the Code, see section 301 of Title 21 and Tables.

Paragraph (4) and subsection (e)(4), referred to in subsecs. (e)(5) and (f)(1)(B), probably means text that was editorially designated as par. (4) of subsec. (e). See 1993 Amendment note below.

Section 507 of the Federal Food, Drug, and Cosmetic Act, referred to in subsec. (k)(2)(A)(i), was repealed by Pub. L. 105–115, title I, § 125(b)(1), Nov. 21, 1997, 111 Stat. 2325.

Section 107(c)(3) of the Drug Amendments of 1962, referred to in subsec. (k)(2)(A)(iii)(I), is section 107(c)(3) of Pub. L. 87–781 which is set out in an Effective Date of 1962 Amendment note under section 321 of Title 21, Food and Drugs.

Section 506 of the Federal Food, Drug, and Cosmetic Act, referred to in subsec. (k)(2)(C), was repealed and a new section 506 enacted by Pub. L. 105–115, title I, §§ 112(a), 125(a)(1), Nov. 21, 1997, 111 Stat. 2309, 2325, which no longer relates to insulin.

Codification

Subsec. (i) of this section, which required the Secretary to transmit to the Committee on Finance of the Senate, the Committee on Energy and Commerce of the House of Representatives, and the Committees on Aging of the Senate and the House of Representatives an annual report on the operation of this section in the preceding fiscal year, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, set out as a note under section 1113 of Title 31, Money and Finance. See, also, item 9 on page 93 of House Document No. 103–7.

Prior Provisions

A prior section 1927 of act Aug. 14, 1935, was renumbered section 1939 and is classified to section 1396v of this title.

Amendments

2022—Subsec. (a)(3). Pub. L. 117–169, § 11001(b)(1)(G)(ii), inserted at end “The preceding sentence shall not apply to a single source drug or innovator multiple source drug of a manufacturer for any period described in section 5000D(c)(1) of the Internal Revenue Code of 1986 with respect to the manufacturer.”

Subsec. (b)(3)(D)(i). Pub. L. 117–169, § 11102(b)(3), substituted “, section 1320f–1(f) of this title, including rebates under paragraph (4) of such section, or section 1395w–114b of this title” for “or section 1320f–1(f) of this title, including rebates under paragraph (4) of such section”.

Pub. L. 117–169, § 11101(c)(3), inserted “and the rebate” after “the payment amount”.

Pub. L. 117–169, § 11002(b), substituted “or to carry out section 1395w–3b of this title or section 1320f–1(f) of this title, including rebates under paragraph (4) of such section” for “or to carry out section 1395w–3b of this title”.

Subsec. (c)(1)(C)(i)(VI). Pub. L. 117–169, § 11201(e)(8)(A), inserted before period at end “or under the manufacturer discount program under section 1395w–114c of this title”.

Pub. L. 117–169, § 11001(b)(2)(A), substituted “subject to clause (ii)(V), any prices charged” for “any prices charged”.

Subsec. (c)(1)(C)(ii)(I). Pub. L. 117–169, § 11102(b)(2), substituted “, section 1395w–3a(i) of this title, or section 1395w–114b of this title” for “or section 1395w–3a(i) of this title”.

Pub. L. 117–169, § 11101(c)(2), inserted “or section 1395w–3a(i) of this title” after “this section”.

Subsec. (c)(1)(C)(ii)(V). Pub. L. 117–169, § 11001(b)(2)(B), added subcl. (V).

Subsec. (k)(1)(B)(i)(V). Pub. L. 117–169, § 11201(e)(8)(B), inserted “or under section 1395w–114c of this title” after “section 1395w–114a of this title”.

Subsec. (k)(1)(B)(i)(VI). Pub. L. 117–169, § 11001(b)(3), added subcl. (VI).

Subsec. (k)(1)(B)(i)(VII). Pub. L. 117–169, § 11101(c)(4), added subcl. (VII).

Subsec. (k)(1)(B)(i)(VIII). Pub. L. 117–169, § 11102(b)(4), added subcl. (VIII). Conforming amendments striking “and” at the end of subcl. (VI) and substituting semicolon for period at the end of subcl. (VII) could not be executed as directed after the amendment by Pub. L. 117–169, § 11101(c)(4)(B), (C).

2021—Subsec. (c)(2)(D). Pub. L. 117–2, § 9816, inserted “and before January 1, 2024,” after “December 31, 2009,”.

Subsec. (d)(7)(E). Pub. L. 117–2, § 9811(a)(4)(B), added subpar. (E).

2020—Subsec. (b)(3)(A). Pub. L. 116–260, § 401(c)(1), inserted at end of concluding provisions “For purposes of applying clause (iii), for calendar quarters beginning on or after January 1, 2022, a drug or biological described in the flush matter following such clause includes items, services, supplies, and products that are payable under part B of subchapter XVIII as a drug or biological.”

Subsec. (b)(3)(A)(iii). Pub. L. 116–260, § 401(c)(2), substituted “section 1395rr(b)(14)(B) of this title” for “section 1395rr(b)(13)(A)(ii) of this title” in concluding provisions.

Subsec. (b)(3)(D). Pub. L. 116–260, § 112(b)(5), (6), in concluding provisions, substituted “1395w–104(c)(2)(G) of this title” for “1395w–104(c)(2)(E) of this title” and inserted at end “Any information disclosed to the Executive Director of the Medicare Payment Advisory Commission or the Executive Director of the Medicaid and CHIP Payment and Access Commission pursuant to this subparagraph shall not be disclosed by either such Executive Director in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler. Such information also shall not be disclosed by either such Executive Director to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler.”

Pub. L. 116–260, § 112(b)(1), substituted “subsection (a)(6)(A)” for “subsection (a)(6)(A)(ii)” in introductory provisions.

Subsec. (b)(3)(D)(vii). Pub. L. 116–260, § 112(b)(2)–(4), added cl. (vii).

Subsec. (d)(7)(D). Pub. L. 116–159 added subpar. (D).

2019—Subsec. (b)(1)(B). Pub. L. 116–16, § 6(b)(2), inserted “, including amounts received by a State under subsection (c)(4),” after “in any quarter”.

Subsec. (b)(3). Pub. L. 116–16, § 6(a)(1)(A), inserted “and drug product” after “price” in heading.

Subsec. (b)(3)(A)(ii), (iii). Pub. L. 116–16, § 6(a)(1)(B)(i), (ii), struck out “and” at end of cl. (ii) and substituted semicolon for period at end of cl. (iii).

Subsec. (b)(3)(A)(v). Pub. L. 116–16, § 6(a)(1)(B)(iii), (iv), added cl. (v).

Subsec. (b)(3)(C)(ii). Pub. L. 116–16, § 6(a)(1)(C)(i), (2)(B), inserted “, including information related to drug pricing, drug product information, and data related to drug pricing or drug product information,” after “provides false information” and substituted “subsections (a), (b), (f)(3), and (f)(4)” for “subsections (a) and (b)”.

Subsec. (b)(3)(C)(iii), (iv). Pub. L. 116–16, § 6(a)(1)(C)(ii), added cls. (iii) and (iv).

Subsec. (b)(3)(D)(vi). Pub. L. 116–16, § 6(a)(1)(C)(iii), added cl. (vi).

Subsec. (c)(4). Pub. L. 116–16, § 6(b)(1), added par. (4).

Subsec. (k)(1)(C). Pub. L. 116–59, § 1603(a), substituted “Exclusion” for “Inclusion” in heading and “the manufacturer’s new drug application” for “a new drug application” and “exclusive” for “inclusive” in text.

Subsec. (k)(2)(A). Pub. L. 116–16, § 6(c)(1), substituted “paragraph (4)” for “paragraph (5)” in introductory provisions.

Subsec. (k)(7)(A)(i). Pub. L. 116–16, § 6(c)(2)(B), substituted “, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4),” for “(not including any drug described in paragraph (5))”.

Subsec. (k)(7)(A)(ii). Pub. L. 116–16, § 6(c)(2)(A), (C), substituted “is marketed” for “was originally marketed” and “a new drug application” for “an original new drug application” and inserted “, unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation))” before period at end.

Subsec. (k)(7)(A)(iv). Pub. L. 116–16, § 6(c)(2)(A), (D), substituted “a new drug application” for “an original new drug application” and inserted “, including a drug product approved for marketing as a non-prescription drug that is regarded as a covered outpatient drug under paragraph (4),” after “covered outpatient drug”, “unless the Secretary determines that a narrow exception applies (as described in section 447.502 of title 42, Code of Federal Regulations (or any successor regulation))” after “under the new drug application”, and “Such term also includes a covered outpatient drug that is a biological product licensed, produced, or distributed under a biologics license application approved by the Food and Drug Administration.” at end.

Subsec. (k)(11). Pub. L. 116–59, § 1603(b), struck out “manufacturers,” before “repackers,” and “manufacturer’s and” before “distributor’s warehouses,”.

2018—Subsec. (c)(2)(C). Pub. L. 115–123 added cls. (i) to (iii) and struck out introductory provisions and former cls. (i) to (iii) which read as follows: “In the case of a drug that is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the rebate obligation with respect to such drug under this section shall be the amount computed under this section for such new drug or, if greater, the product of—

“(i) the average manufacturer price of the line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form;

“(ii) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and

“(iii) the total number of units of each dosage form and strength of the line extension product paid for under the State plan in the rebate period (as reported by the State).”

Subsec. (g)(1)(A). Pub. L. 115–271, § 1004(b)(1)(A), substituted “of section 1396a(a)(54)” for “of section 1396b(i)(10)(B)”, struck out “, by not later than January 1, 1993,” after “shall provide”, and substituted “gross overuse, excessive utilization, inappropriate or medically unnecessary care, or prescribing or billing practices that indicate abuse or excessive utilization” for “gross overuse, or inappropriate or medically unnecessary care”.

Subsec. (g)(2)(B). Pub. L. 115–271, § 1004(b)(1)(B), substituted “gross overuse, excessive utilization, inappropriate or medically unnecessary care, or prescribing or billing practices that indicate abuse or excessive utilization” for “gross overuse, or inappropriate or medically unnecessary care”.

2016—Subsec. (c)(2)(C). Pub. L. 114–198 inserted before period at end of concluding provisions “, but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation”.

2015—Subsec. (c)(3)(A). Pub. L. 114–74, § 602(a)(1), substituted “Except as provided in subparagraph (C), the amount” for “The amount”.

Subsec. (c)(3)(C). Pub. L. 114–74, § 602(a)(2), added subpar. (C).

2010—Subsec. (a)(5)(B). Pub. L. 111–309 substituted a period for “and a children’s hospital described in section 1395ww(d)(1)(B)(iii) of this title which meets the requirements of clauses (i) and (iii) of section 256b(b)(4)(L) of this title and which would meet the requirements of clause (ii) of such section if that clause were applied by taking into account the percentage of care provided by the hospital to patients eligible for medical assistance under a State plan under this subchapter.”

Subsec. (b)(1)(A). Pub. L. 111–148, § 2501(c)(2)(A)(i), inserted “, including such drugs dispensed to individuals enrolled with a medicaid managed care organization if the organization is responsible for coverage of such drugs” after “for such period”.

Subsec. (b)(1)(C). Pub. L. 111–148, § 2501(a)(2), added subpar. (C).

Subsec. (b)(2)(A). Pub. L. 111–148, § 2501(c)(2)(A)(ii), inserted “including such information reported by each medicaid managed care organization,” after “for which payment was made under the plan during the period,”.

Subsec. (b)(3)(A). Pub. L. 111–148, § 2503(b)(1)(B), which directed insertion, in the second sentence, of “(relating to the weighted average of the most recently reported monthly average manufacturer prices)” after “(D)(v)” was executed by making the insertion in concluding provisions to reflect the probable intent of Congress.

Subsec. (b)(3)(A)(iv). Pub. L. 111–148, § 2503(b)(1)(A), which directed, in the first sentence, addition of cl. (iv) after cl. (iii), was executed by adding cl. (iv) after cl. (iii) to reflect the probable intent of Congress.

Subsec. (b)(3)(D)(v). Pub. L. 111–148, § 2503(b)(2), substituted “the weighted average of the most recently reported monthly average manufacturer prices and the average retail survey price determined for each multiple source drug in accordance with subsection (f)” for “average manufacturer prices”.

Subsec. (c)(1)(B)(i)(IV) to (VI). Pub. L. 111–148, § 2501(a)(1)(A), struck out “and” at end of subcl. (IV), inserted “and before January 1, 2010” after “December 31, 1995,” and substituted “; and” for period at end in subcl. (V), and added subcl. (VI).

Subsec. (c)(1)(B)(iii). Pub. L. 111–148, § 2501(a)(1)(B), added cl. (iii).

Subsec. (c)(1)(C)(i)(VI). Pub. L. 111–148, § 3301(d)(2), inserted “, or any discounts provided by manufacturers under the Medicare coverage gap discount program under section 1395w–114a of this title” before period at end.

Subsec. (c)(2)(C). Pub. L. 111–152, § 1206(a), amended subpar. (C) generally. Prior to amendment, text read as follows:

“(i) In general.—Except as provided in clause (ii), in the case of a drug that is a new formulation, such as an extended-release formulation, of a single source drug or an innovator multiple source drug, the rebate obligation with respect to the drug under this section shall be the amount computed under this section for the new formulation of the drug or, if greater, the product of—

“(I) the average manufacturer price for each dosage form and strength of the new formulation of the single source drug or innovator multiple source drug;

“(II) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and

“(III) the total number of units of each dosage form and strength of the new formulation paid for under the State plan in the rebate period (as reported by the State).

“(ii) No application to new formulations of orphan drugs.—Clause (i) shall not apply to a new formulation of a covered outpatient drug that is or has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, without regard to whether the period of market exclusivity for the drug under section 527 of such Act has expired or the specific indication for use of the drug.”

Pub. L. 111–148, § 2501(d)(1), added subpar. (C).

Subsec. (c)(2)(D). Pub. L. 111–148, § 2501(e), added subpar. (D).

Subsec. (c)(3)(B). Pub. L. 111–148, § 2501(b), struck out “and” at end of cl. (i), inserted “and before January 1, 2010,” after “December 31, 1993,” and substituted “; and” for period at end in cl. (ii), and added cl. (iii).

Subsec. (d)(2)(E). Pub. L. 111–148, § 2502(a)(1), redesignated subpar. (F) as (E) and struck out former subpar. (E) which read as follows: “Agents when used to promote smoking cessation.”

Subsec. (d)(2)(F). Pub. L. 111–148, § 4107(b), inserted “, except, in the case of pregnant women when recommended in accordance with the Guideline referred to in section 1396d(bb)(2)(A) of this title, agents approved by the Food and Drug Administration under the over-the-counter monograph process for purposes of promoting, and when used to promote, tobacco cessation” before period at end.

Pub. L. 111–148, § 2502(a)(1)(B), redesignated subpar. (G) as (F). Former subpar. (F) redesignated (E).

Subsec. (d)(2)(G) to (K). Pub. L. 111–148, § 2502(a)(1), redesignated subpars. (H) and (K) as (G) and (H), respectively, and struck out subpars. (I) and (J) which read as follows:

“(I) Barbiturates.

“(J) Benzodiazepines.”

Subsec. (d)(7). Pub. L. 111–148, § 2502(a)(2), added par. (7).

Subsec. (e)(4). Pub. L. 111–148, § 2503(a)(1)(A), struck out “(or, effective January 1, 2007, two or more)” after “three or more”.

Subsec. (e)(5). Pub. L. 111–148, § 2503(a)(1)(B), added par. (5) and struck out former par. (5). Prior to amendment, text read as follows: “Effective January 1, 2007, in applying the Federal upper reimbursement limit under paragraph (4) and section 447.332(b) of title 42 of the Code of Federal Regulations, the Secretary shall substitute 250 percent of the average manufacturer price (as computed without regard to customary prompt pay discounts extended to wholesalers) for 150 percent of the published price.”

Subsec. (f)(1)(A)(i). Pub. L. 111–148, § 2503(c)(1), inserted “with respect to a retail community pharmacy,” before “the determination”.

Subsec. (f)(1)(C)(ii). Pub. L. 111–148, § 2503(c)(2), substituted “retail community pharmacies” for “retail pharmacies”.

Subsec. (j)(1). Pub. L. 111–148, § 2501(c)(2)(B), added par. (1) and struck out former par. (1) which read as follows: “Covered outpatient drugs dispensed by health maintenance organizations, including medicaid managed care organizations that contract under section 1396b(m) of this title, are not subject to the requirements of this section.”

Subsec. (k)(1)(A). Pub. L. 111–148, § 2503(a)(2)(A), substituted “by—” for “by wholesalers for drugs distributed to the retail pharmacy class of trade.” and added cls. (i) and (ii).

Subsec. (k)(1)(B). Pub. L. 111–148, § 2503(a)(2)(B), added subpar. (B) and struck out former subpar. (B). Prior to amendment, text read as follows: “The average manufacturer price for a covered outpatient drug shall be determined without regard to customary prompt pay discounts extended to wholesalers.”

Subsec. (k)(1)(B)(i)(IV). Pub. L. 111–226 inserted at end “, unless the drug is an inhalation, infusion, instilled, implanted, or injectable drug that is not generally dispensed through a retail community pharmacy; and”.

Subsec. (k)(1)(B)(i)(V). Pub. L. 111–152, § 1101(c), added subcl. (V).

Subsec. (k)(1)(C). Pub. L. 111–148, § 2503(a)(2)(C), substituted “retail community pharmacies” for “the retail pharmacy class of trade”.

Subsec. (k)(7)(A)(i)(III). Pub. L. 111–148, § 2503(a)(3)(A), substituted “the United States” for “the State”.

Subsec. (k)(7)(C). Pub. L. 111–148, § 2503(a)(3)(B), inserted “and” after semicolon at end of cl. (i), substituted period for “; and” at end of cl. (ii), and struck out cl. (iii) which read as follows: “a drug product is considered to be sold or marketed in a State if it appears in a published national listing of average wholesale prices selected by the Secretary, provided that the listed product is generally available to the public through retail pharmacies in that State.”

Subsec. (k)(10), (11). Pub. L. 111–148, § 2503(a)(4), added pars. (10) and (11).

2009—Subsec. (c)(1)(D)(i)(IV) to (VI). Pub. L. 111–8, § 221(a)(1), added subcls. (IV) and (V) and redesignated former subcl. (IV) as (VI).

Subsec. (c)(1)(D)(iv). Pub. L. 111–8, § 221(a)(2), added cl. (iv).

2006—Subsec. (a)(5)(B). Pub. L. 109–171, § 6004(a), inserted before period at end “and a children’s hospital described in section 1395ww(d)(1)(B)(iii) of this title which meets the requirements of clauses (i) and (iii) of section 256b(b)(4)(L) of this title and which would meet the requirements of clause (ii) of such section if that clause were applied by taking into account the percentage of care provided by the hospital to patients eligible for medical assistance under a State plan under this subchapter”.

Subsec. (a)(7). Pub. L. 109–171, § 6002(a), added par. (7).

Subsec. (b)(3)(A). Pub. L. 109–171, § 6001(b)(1)(B), inserted “Beginning July 1, 2006, the Secretary shall provide on a monthly basis to States under subparagraph (D)(iv) the most recently reported average manufacturer prices for single source drugs and for multiple source drugs and shall, on at least a quarterly basis, update the information posted on the website under subparagraph (D)(v).” at end of concluding provisions.

Subsec. (b)(3)(A)(i). Pub. L. 109–171, § 6003(a)(1), added cl. (i) and struck out former cl. (i) which read as follows: “not later than 30 days after the last day of each month of a rebate period under the agreement (beginning on or after January 1, 1991), on the average manufacturer price (as defined in subsection (k)(1) of this section), customary prompt pay discounts extended to wholesalers, and, (for single source drugs and innovator multiple source drugs), the manufacturer’s best price (as defined in subsection (c)(2)(B) of this section) for covered outpatient drugs for the rebate period under the agreement,;”.

Pub. L. 109–171, § 6001(b)(1)(A), (c)(2), inserted “month of a” after “last day of each” and “, customary prompt pay discounts extended to wholesalers,” after “(k)(1) of this section)”.

Subsec. (b)(3)(A)(ii). Pub. L. 109–171, § 6003(a)(2), inserted “(including for such drugs that are sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act)” after “drugs”.

Subsec. (b)(3)(A)(iii). Pub. L. 109–171, § 6001(d)(1), inserted “, and, for calendar quarters beginning on or after January 1, 2007 and only with respect to the information described in subclause (III), for covered outpatient drugs” before period at end.

Subsec. (b)(3)(D)(iv), (v). Pub. L. 109–171, § 6001(b)(2), added cls. (iv) and (v).

Subsec. (c)(1)(C)(i). Pub. L. 109–171, § 6003(b)(1)(A), inserted “(including the lowest price available to any entity for any such drug of a manufacturer that is sold under a new drug application approved under section 505(c) of the Federal Food, Drug, and Cosmetic Act)” after “or innovator multiple source drug of a manufacturer” in introductory provisions.

Subsec. (c)(1)(C)(ii)(IV). Pub. L. 109–171, § 6003(b)(1)(B), added subcl. (IV).

Subsec. (c)(1)(D). Pub. L. 109–171, § 6001(d)(2), added subpar. (D).

Subsec. (e)(4). Pub. L. 109–171, § 6001(a)(1), which directed substitution of “Subject to paragraph (5), the Secretary” for “The Secretary” and insertion of “(or, effective January 1, 2007, two or more)” after “three or more” in subsec. (e)(4), was executed to the last par. of subsec. (e) to reflect the probable intent of Congress. See 1993 Amendment note below.

Subsec. (e)(5). Pub. L. 109–171, § 6001(a)(2), added par. (5).

Subsec. (f). Pub. L. 109–171, § 6001(e), added subsec. (f).

Subsec. (g)(1)(B)(i)(II). Pub. L. 109–171, § 6001(f)(1), which directed insertion of “(or its successor publications)” after “United States Pharmacopoeia-Drug Information”, was executed by making insertion after “United States Pharmacopeia-Drug Information” to reflect the probable intent of Congress.

Subsec. (g)(2)(A)(ii). Pub. L. 109–171, § 6001(f)(2), inserted “, or to require verification of the offer to provide consultation or a refusal of such offer” before period at end of concluding provisions.

Subsec. (k)(1). Pub. L. 109–171, § 6001(c)(1), designated existing provisions as subpar. (A), inserted heading, substituted “Subject to subparagraph (B), the term” for “The term”, struck out “, after deducting customary prompt pay discounts” before period at end, and added subpar. (B).

Subsec. (k)(1)(C). Pub. L. 109–171, § 6003(b)(2), as amended by Pub. L. 109–432, added subpar. (C).

Subsec. (k)(7)(A)(i). Pub. L. 109–171, § 6001(a)(4), substituted “is” for “are” in subcls. (I), (II), and (III).

Pub. L. 109–171, § 6001(a)(3), substituted “at least 1 other drug product” for “are 2 or more drug products” in introductory provisions.

2005—Subsec. (d)(2)(K). Pub. L. 109–91 added subpar. (K).

2003—Subsec. (a)(1). Pub. L. 108–173, § 303(i)(4)(A), inserted “or under part B of subchapter XVIII” after “section 1396b(a) of this title”.

Subsec. (b)(3)(A). Pub. L. 108–173, § 303(i)(4)(B), added cl. (iii) and concluding provisions.

Subsec. (b)(3)(B). Pub. L. 108–173, § 303(i)(4)(C), inserted “and manufacturer’s average sales price” after “average manufacturer price” in heading and “and manufacturer’s average sales prices (including wholesale acquisition cost) if required to make payment” after “manufacturer prices” in text.

Subsec. (b)(3)(D). Pub. L. 108–173, § 303(i)(4)(D)(i), inserted “(other than the wholesale acquisition cost for purposes of carrying out section 1395w–3a of this title)” after “subsection (a)(6)(A)(ii)” in introductory provisions.

Pub. L. 108–173, § 105(b), which directed insertion of “and drug pricing data reported under the first sentence of section 1395w–141(i)(1) of this title” after “section 1395w–104(c)(2)(E) of this title” in last sentence, was executed by making the insertion after “or 1395w–104(c)(2)(E) of this title” in concluding provisions to reflect the probable intent of Congress.

Pub. L. 108–173, § 101(e)(4), inserted concluding provisions.

Subsec. (b)(3)(D)(i). Pub. L. 108–173, § 303(i)(4)(D)(ii), inserted “, to carry out section 1395w–3a of this title (including the determination and implementation of the payment amount), or to carry out section 1395w–3b of this title” after “this section”.

Subsec. (c)(1)(C)(i)(I). Pub. L. 108–173, § 1002(a), inserted “(including inpatient prices charged to hospitals described in section 256b(a)(4)(L) of this title)” before semicolon at end.

Subsec. (c)(1)(C)(i)(V), (VI). Pub. L. 108–173, § 103(e)(1), added subcls. (V) and (VI).

Subsec. (c)(1)(C)(iii). Pub. L. 108–173, § 1002(b), added cl. (iii).

Subsec. (e)[(4)]. Pub. L. 108–173, § 900(e)(1)(K), (L), which directed substitution of “The Secretary” for “HCFA” in subsecs. (e)(4) and (f)(2), was executed to the last par. of subsec. (e) to reflect the probable intent of Congress. See 1993 Amendment note below.

Subsec. (g)(1)(B)(i)(II). Pub. L. 108–173, § 101(e)(9)(A), inserted “and” at end.

Subsec. (g)(1)(B)(i)(IV). Pub. L. 108–173, § 101(e)(9)(B), struck out subcl. (IV) which read as follows: “American Medical Association Drug Evaluations; and”.

1999—Subsec. (a)(1). Pub. L. 106–113, § 1000(a)(6) [title VI, § 606(a)], substituted “shall become effective as of the date on which the agreement is entered into or, at State option, on any date thereafter on or before” for “shall not be effective until”.

Subsec. (g)(2)(A)(ii)(II)(cc). Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(u)(1)], substituted “individual’s” for “individuals”.

Subsec. (i)(1). Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(u)(2)], substituted “the operation of this section” for “the the operation of this section”.

Subsec. (k)(7)(A)(iv). Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(u)(3)(A)], substituted “distributors” for “distributers”.

Subsec. (k)(7)(C)(i). Pub. L. 106–113, § 1000(a)(6) [title VI, § 608(u)(3)(B)], substituted “pharmaceutically” for “pharmaceuutically”.

1997—Subsec. (g)(1)(B)(i)(III), (IV). Pub. L. 105–33, § 4756, added subcl. (III) and redesignated former subcl. (III) as (IV).

Subsec. (j)(1). Pub. L. 105–33, § 4701(b)(2)(A)(x), substituted “health maintenance organizations, including medicaid managed care organizations” for “* * * Health Maintenance Organizations, including those organizations”.

1993—Subsec. (b)(1)(A). Pub. L. 103–66, § 13602(a)(2)(A)(i)(II), which directed amendment of subpar. (A) by substituting “dispensed after December 31, 1990, for which payment was made under the State plan for such period” for “dispensed under the plan during the quarter (or other period as the Secretary may specify)”, was executed by making the substitution for “dispensed under the plan during the quarter (or such other period as the Secretary may specify)” to reflect the probable intent of Congress.

Pub. L. 103–66, § 13602(a)(2)(A)(i)(I), substituted “for a rebate period” for “each calendar quarter (or periodically in accordance with a schedule specified by the Secretary)”.

Subsec. (b)(2)(A). Pub. L. 103–66, § 13602(a)(2)(A)(ii), substituted “each rebate period” for “each calendar quarter” and “units of each dosage form and strength and package size” for “dosage units”, inserted “after December 31, 1990, for which payment was made” after “dispensed”, and substituted “during the period” for “during the quarter”.

Subsec. (b)(3)(A)(i). Pub. L. 103–66, § 13602(a)(2)(A)(iii), substituted “rebate period under the agreement” for “quarter” in two places.

Subsec. (c). Pub. L. 103–66, § 13602(a)(1), added subsec. (c) and struck out former subsec. (c) which related to determination of amount of rebate for certain drugs.

Pub. L. 103–18 substituted “such drug, except that for the calendar quarter beginning after September 30, 1992, and before January 1, 1993, the amount of the rebate may not exceed 50 percent of such average manufacturer price;” for “such drug;” in par. (1)(B)(ii)(II).

Subsecs. (d) to (f). Pub. L. 103–66, § 13602(a)(1), added subsecs. (d) and (e), struck out former subsecs. (d) consisting of pars. (1) to (8) relating to limitations on coverage of drugs, (e) relating to denial of Federal financial participation in certain cases, and (f)(1) relating to reductions in pharmacy reimbursement limits, and struck out par. designation for former par. (2) of subsec. (f) without supplying a new designation. The text of former subsec. (f)(2) is now the last par. of subsec. (e).

Subsec. (k)(1). Pub. L. 103–66, § 13602(a)(2)(B)(i), substituted “rebate period” for “calendar quarter” and inserted before period at end “, after deducting customary prompt pay discounts”.

Subsec. (k)(3). Pub. L. 103–66, § 13602(a)(2)(B)(ii)(III), in concluding provisions, substituted “for which a National Drug Code number is not required by the Food and Drug Administration or a drug or biological used” for “which is used” and inserted at end “Any drug, biological product, or insulin excluded from the definition of such term as a result of this paragraph shall be treated as a covered outpatient drug for purposes of determining the best price (as defined in subsection (c)(1)(C)) for such drug, biological product, or insulin.”

Subsec. (k)(3)(E). Pub. L. 103–66, § 13602(a)(2)(B)(ii)(I), struck out “ * * emergency room visits” after “services”.

Subsec. (k)(3)(F). Pub. L. 103–66, § 13602(a)(2)(B)(ii)(II), which directed amendment of subpar. (F) by substituting “services and services provided by an intermediate care facility for the mentally retarded” for “services”, was executed by making the substitution for “sevices” to reflect the probable intent of Congress because the word “services” did not appear.

Subsec. (k)(6). Pub. L. 103–66, § 13602(a)(2)(B)(iii), substituted “or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(i).” for “, which appears in peer-reviewed medical literature or which is accepted by one or more of the following compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluations, and the United States Pharmacopeia-Drug Information.”

Subsec. (k)(7)(A)(i). Pub. L. 103–66, § 13602(a)(2)(B)(iv), substituted “rebate period” for “calendar quarter” in introductory provisions.

Subsec. (k)(8), (9). Pub. L. 103–66, § 13602(a)(2)(B)(v), added par. (8) and redesignated former par. (8) as (9).

1992—Subsec. (a)(1). Pub. L. 102–585, § 601(b)(1), substituted “manufacturer), and must meet the requirements of paragraph (5) (with respect to drugs purchased by a covered entity on or after the first day of the first month that begins after November 4, 1992) and paragraph (6)” for “manufacturer)”.

Subsec. (a)(5), (6). Pub. L. 102–585, § 601(b)(2), added pars. (5) and (6).

Subsec. (b)(3)(D). Pub. L. 102–585, § 601(b)(3), substituted “this paragraph or under an agreement with the Secretary of Veterans Affairs described in subsection (a)(6)(A)(ii)” for “this paragraph”, “Secretary or the Secretary of Veterans Affairs” for “Secretary”, and “except—” and cls. (i) to (iii) for “except as the Secretary determines to be necessary to carry out this section and to permit the Comptroller General to review the information provided.”

Subsec. (b)(4)(B)(ii). Pub. L. 102–585, § 601(b)(4)(i), (ii), substituted “the calendar quarter beginning at least 60 days” for “such period” and “the manufacturer provides notice to the Secretary.” for “of the notice as the Secretary may provide (but not beyond the term of the agreement).”

Subsec. (b)(4)(B)(iv), (v). Pub. L. 102–585, § 601(b)(4)(iii), added cls. (iv) and (v).

Subsec. (c)(1)(B)(i). Pub. L. 102–585, § 601(c)(1), which directed the substitution of “October 1, 1992,” for “January 1, 1993,”, was executed by making the substitution in introductory provisions and in subcl. (II), to reflect the probable intent of Congress.

Subsec. (c)(1)(B)(ii) to (v). Pub. L. 102–585, § 601(c)(2), (3), added cls. (ii) to (v) and struck out former cl. (ii) which read as follows: “for quarters (or other periods) beginning after December 31, 1992, the greater of—

“(I) the difference between the average manufacturer price for a drug and 85 percent of such price, or

“(II) the difference between the average manufacturer price for a drug and the best price (as defined in paragraph (2)(B)) for such quarter (or period) for such drug.”

Subsec. (c)(1)(C). Pub. L. 102–585, § 601(a), substituted “(excluding any prices charged on or after October 1, 1992, to the Indian Health Service, the Department of Veterans Affairs, a State home receiving funds under section 1741 of title 38, the Department of Defense, the Public Health Service, or a covered entity described in subsection (a)(5)(B) of this section, any prices charged under the Federal Supply Schedule of the General Services Administration, or any prices used under a State pharmaceutical assistance program, and excluding” for “(excluding”.

Statutory Notes and Related Subsidiaries

Effective Date of 2020 Amendment

Amendment made by Pub. L. 116–159 effective as if included in the enactment of section 1006(b) of the SUPPORT for Patients and Communities Act (Public Law 115–271; 132 Stat. 3914), see section 2601(c) of Pub. L. 116–159, set out as a note under section 1396d of this title.

Effective Date of 2019 Amendment

Pub. L. 116–59, div. B, title VI, § 1603(c), Sept. 27, 2019, 133 Stat. 1108, provided that: “The amendments made by this section [amending this section] shall take effect on the first day of the first fiscal quarter that begins after the date of enactment of this Act [Sept. 27, 2019].”

Amendment by Pub. L. 116–16 effective on Apr. 18, 2019, and applicable to covered outpatient drugs supplied by manufacturers under agreements under this section on or after that date, see section 6(e) of Pub. L. 116–16, set out as a note under section 1320a–7 of this title.

Effective Date of 2018 Amendment

Pub. L. 115–271, title I, § 1004(b)(2), Oct. 24, 2018, 132 Stat. 3912, provided that: “The amendments made by paragraph (1) [amending this section] shall take effect with respect to retrospective drug use reviews conducted on or after October 1, 2020.”

Pub. L. 115–123, div. E, title XII, § 53104(b), Feb. 9, 2018, 132 Stat. 302, provided that: “The amendments made [by] subsection (a) [amending this section] shall apply with respect to rebate periods beginning on or after October 1, 2018.”

Effective Date of 2016 Amendment

Pub. L. 114–198, title VII, § 705(b), July 22, 2016, 130 Stat. 753, provided that: “The amendment made by subsection (a) [amending this section] shall apply to drugs that are paid for by a State in calendar quarters beginning on or after the date of the enactment of this Act [July 22, 2016].”

Effective Date of 2015 Amendment

Pub. L. 114–74, title VI, § 602(b), Nov. 2, 2015, 129 Stat. 597, provided that: “The amendments made by subsection (a) [amending this section] shall apply to rebate periods beginning after the date that is one year after the date of the enactment of this Act [Nov. 2, 2015].”

Effective Date of 2010 Amendment

Pub. L. 111–226, title II, § 202, Aug. 10, 2010, 124 Stat. 2394, provided that the amendment made by Pub. L. 111–226 is effective as if included in the enactment of Pub. L. 111–148.

Pub. L. 111–152, title I, § 1206(b), Mar. 30, 2010, 124 Stat. 1057, provided that: “The amendment made by subsection (a) [amending this section] shall take effect as if included in the enactment of the Patient Protection and Affordable Care Act [Pub. L. 111–148].”

Pub. L. 111–148, title II, § 2501(d)(2), Mar. 23, 2010, 124 Stat. 309, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to drugs that are paid for by a State after December 31, 2009.”

Pub. L. 111–148, title II, § 2502(b), Mar. 23, 2010, 124 Stat. 310, provided that: “The amendments made by this section [amending this section] shall apply to services furnished on or after January 1, 2014.”

Pub. L. 111–148, title II, § 2503(d), Mar. 23, 2010, 124 Stat. 312, provided that: “The amendments made by this section [amending this section] shall take effect on the first day of the first calendar year quarter that begins at least 180 days after the date of enactment of this Act [Mar. 23, 2010], without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.”

Amendment by section 3301(d)(2) of Pub. L. 111–148 applicable to drugs dispensed on or after July 1, 2010, see section 3301(d)(3) of Pub. L. 111–148, set out as a note under section 1320a–7b of this title.

Amendment by section 4107(b) of Pub. L. 111–148 effective Oct. 1, 2010, see section 4107(d) of Pub. L. 111–148, set out as a note under section 1396d of this title.

Effective Date of 2009 Amendment

Pub. L. 111–8, div. F, title II, § 221(b), Mar. 11, 2009, 123 Stat. 783, provided that: “The amendments made by this subsection [probably means this section, amending this section] shall take effect as if included in the amendment made by section 6001(d)(2) of the Deficit Reduction Act of 2005 [Pub. L. 109–171].”

Effective Date of 2006 Amendment

Pub. L. 109–432, div. B, title IV, § 405(c)(2)(A), Dec. 20, 2006, 120 Stat. 2999, provided that the amendment made by section 405(c)(2)(A) is effective as if included in the enactment of the Deficit Reduction Act of 2005 (Public Law 109–171).

Pub. L. 109–171, title VI, § 6001(f)(3), Feb. 8, 2006, 120 Stat. 58, provided that: “The amendments made by this subsection [amending this section and section 1395x of this title] shall take effect on the date of the enactment of this Act [Feb. 8, 2006].”

Pub. L. 109–171, title VI, § 6001(g), Feb. 8, 2006, 120 Stat. 58, provided that: “Except as otherwise provided, the amendments made by this section [amending this section and section 1395x of this title] shall take effect on January 1, 2007, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.”

Pub. L. 109–171, title VI, § 6003(c), Feb. 8, 2006, 120 Stat. 61, provided that: “The amendments made by this section [amending this section] take effect on January 1, 2007.”

Pub. L. 109–171, title VI, § 6004(b), Feb. 8, 2006, 120 Stat. 61, provided that: “The amendment made by subsection (a) [amending this section] shall apply to drugs purchased on or after the date of the enactment of this Act [Feb. 8, 2006].”

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–91 applicable to drugs dispensed on or after Jan. 1, 2006, see section 104(d) of Pub. L. 109–91, set out as a note under section 1396b of this title.

Effective Date of 2003 Amendment

Pub. L. 108–173, title I, § 103(e)(2), Dec. 8, 2003, 117 Stat. 2160, provided that: “Section 1927(c)(1)(C)(i)(VI) of the Social Security Act [42 U.S.C. 1396r–8(c)(1)(C)(i)(VI)], as added by paragraph (1), shall apply to prices charged for drugs dispensed on or after January 1, 2006.”

Effective Date of 1999 Amendment

Pub. L. 106–113, div. B, § 1000(a)(6) [title VI, § 606(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–396, provided that: “The amendment made by subsection (a) [amending this section] applies to agreements entered into on or after the date of enactment of this Act [Nov. 29, 1999].”

Amendment by section 1000(a)(6) [title VI, § 608(u)] of Pub. L. 106–113 effective Nov. 29, 1999, see section 1000(a)(6) [title VI, § 608(bb)] of Pub. L. 106–113, set out as a note under section 1396a of this title.

Effective Date of 1997 Amendment

Amendment by Pub. L. 105–33 effective Aug. 5, 1997, and applicable to contracts entered into or renewed on or after Oct. 1, 1997, see section 4710 of Pub. L. 105–33, set out as a note under section 1396b of this title.

Effective Date of 1993 Amendment