42 USC 1320 - Establishment of program

View all text of Part E [§ 1320f - § 1320f-7]

§ 1320f. Establishment of program

(a) In generalThe Secretary shall establish a Drug Price Negotiation Program (in this part referred to as the “program”). Under the program, with respect to each price applicability period, the Secretary shall—

(1) publish a list of selected drugs in accordance with section 1320f–1 of this title;

(2) enter into agreements with manufacturers of selected drugs with respect to such period, in accordance with section 1320f–2 of this title;

(3) negotiate and, if applicable, renegotiate maximum fair prices for such selected drugs, in accordance with section 1320f–3 of this title; 1

1 So in original. Probably should be followed by “and”.

(4) carry out the publication and administrative duties and compliance monitoring in accordance with sections 1320f–4 and 1320f–5 of this title.

(b) Definitions relating to timingFor purposes of this part:

(1) Initial price applicability year

(2) Price applicability period

(3) Selected drug publication date

(4) Negotiation periodThe term “negotiation period” means, with respect to an initial price applicability year with respect to a selected drug, the period—

(A) beginning on the sooner of—

(i) the date on which the manufacturer of the drug and the Secretary enter into an agreement under section 1320f–2 of this title with respect to such drug; or

(ii) February 28 following the selected drug publication date with respect to such selected drug; and

(B) ending on November 1 of the year that begins 2 years prior to the initial price applicability year.

(1) Manufacturer

(2) Maximum fair price eligible individualThe term “maximum fair price eligible individual” means, with respect to a selected drug—

(A) in the case such drug is dispensed to the individual at a pharmacy, by a mail order service, or by another dispenser, an individual who is enrolled in a prescription drug plan under part D of subchapter XVIII or an MA–PD plan under part C of such subchapter if coverage is provided under such plan for such selected drug; and

(B) in the case such drug is furnished or administered to the individual by a hospital, physician, or other provider of services or supplier, an individual who is enrolled under part B of subchapter XVIII, including an individual who is enrolled in an MA plan under part C of such subchapter, if payment may be made under part B for such selected drug.

(3) Maximum fair price

(4) Reference product

(5) Total expenditures

(6) Unit

(d) Timing for initial price applicability year 2026Notwithstanding the provisions of this part, in the case of initial price applicability year 2026, the following rules shall apply for purposes of implementing the program:

(1) Subsection (b)(3) shall be applied by substituting “September 1, 2023” for “, with respect to each initial price applicability year, February 1 of the year that begins 2 years prior to such year”.

(2) Subsection (b)(4) shall be applied—

(A) in subparagraph (A)(ii), by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”; and

(B) in subparagraph (B), by substituting “August 1, 2024” for “November 1 of the year that begins 2 years prior to the initial price applicability year”.

(3)Section 1320f–1 of this title shall be applied—

(A) in subsection (b)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period of 12 months prior to the selected drug publication date (but ending not later than October 31 of the year prior to the year of such drug publication date), with respect to such year, for which data are available”; and

(B) in subsection (d)(1)(A), by substituting “during the period beginning on June 1, 2022, and ending on May 31, 2023” for “during the most recent period for which data are available of at least 12 months prior to the selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date), with respect to such year”.2

2 So in original. Probably should read as follows: “during the most recent 12-month period for which data are available prior to such selected drug publication date (but ending no later than October 31 of the year prior to the year of such drug publication date)”.

(4)Section 1320f–2(a) of this title shall be applied by substituting “October 1, 2023” for “February 28 following the selected drug publication date with respect to such selected drug”.

(5)Section 1320f–3(b)(2) of this title shall be applied—

(A) in subparagraph (A), by substituting “October 2, 2023” for “March 1 of the year of the selected drug publication date, with respect to the selected drug”;

(B) in subparagraph (B), by substituting “February 1, 2024” for “the June 1 following the selected drug publication date”; and

(C) in subparagraph (E), by substituting “August 1, 2024” for “the first day of November following the selected drug publication date, with respect to the initial price applicability year”.

(6)Section 1320f–4(a)(1) of this title shall be applied by substituting “September 1, 2024” for “November 30 of the year that is 2 years prior to such initial price applicability year”.

(Aug. 14, 1935, ch. 531, title XI, § 1191, as added Pub. L. 117–169, title I, § 11001(a), Aug. 16, 2022, 136 Stat. 1833.)