§1320f–5 — Title 42 The Public Health and Welfare | U.S. Code

§1320f–5 Administrative duties and compliance monitoring

Title 42 › Chapter CHAPTER 7— - SOCIAL SECURITY › Subchapter SUBCHAPTER XI— - GENERAL PROVISIONS, PEER REVIEW, AND ADMINISTRATIVE SIMPLIFICATION › Part Part E— - Price Negotiation Program To Lower Prices for Certain High-Priced Single Source Drugs › § 1320f–5

Last updated Apr 6, 2026|Official source

Summary

The federal health official must set up clear procedures so the maximum fair price for certain drugs is used and enforced. The procedures must make sure that price is applied before other health plan payments or discounts, work across different strengths and forms of a drug rather than by package size or formulation, and cover people in Medicare drug plans and Medicare Part B (including Medicare Advantage). The official must also create a negotiation and renegotiation process and a way for drug makers to submit required information. The official must share needed information with the Treasury Department so the tax under the tax code can be figured, including dates when discount or rebate agreements end or begin. The official must monitor drug makers’ compliance with their agreements and set up a way to report violations.

Title 42, §1320f–5

The Public Health and Welfare — Source: USLM XML via OLRC

(a)For purposes of section 1320f(a)(4) of this title, the administrative duties described in this section are the following:

(1)The establishment of procedures to ensure that the maximum fair price for a selected drug is applied before—

(A)any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of maximum fair price eligible individuals; and

(B)any other discounts.

(2)The establishment of procedures to compute and apply the maximum fair price across different strengths and dosage forms of a selected drug and not based on the specific formulation or package size or package type of such drug.

(3)The establishment of procedures to carry out the provisions of this part, as applicable, with respect to—

(A)maximum fair price eligible individuals who are enrolled in a prescription drug plan under part D of subchapter XVIII or an MA–PD plan under part C of such subchapter; and

(B)maximum fair price eligible individuals who are enrolled under part B of such subchapter, including who are enrolled in an MA plan under part C of such subchapter.

(4)The establishment of a negotiation process and renegotiation process in accordance with section 1320f–3 of this title.

(5)The establishment of a process for manufacturers to submit information described in section 1320f–3(b)(2)(A) of this title.

(6)The sharing with the Secretary of the Treasury of such information as is necessary to determine the tax imposed by section 5000D of the Internal Revenue Code of 1986, including the application of such tax to a manufacturer, producer, or importer or the determination of any date described in section 5000D(c)(1) of such Code. For purposes of the preceding sentence, such information shall include—

(A)the date on which the Secretary receives notification of any termination of an agreement under the Medicare coverage gap discount program under section 1395w–114a of this title and the date on which any subsequent agreement under such program is entered into;

(B)the date on which the Secretary receives notification of any termination of an agreement under the manufacturer discount program under section 1395w–114c of this title and the date on which any subsequent agreement under such program is entered into; and

(C)the date on which the Secretary receives notification of any termination of a rebate agreement described in section 1396r–8(b) of this title and the date on which any subsequent rebate agreement described in such section is entered into.

(7)The establishment of procedures for purposes of applying subsections (d)(2)(B) and (f)(1)(C) of section 1320f–1 of this title.

(b)The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under section 1320f–2 of this title and establish a mechanism through which violations of such terms shall be reported.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 5000D of the Internal Revenue Code of 1986, referred to in subsec. (a)(6), is classified to section 5000D of Title 26, Internal Revenue Code.

Amendments

2022—Subsec. (a)(7). Pub. L. 117–169, § 11002(a)(3), substituted “subsections (d)(2)(B) and (f)(1)(C) of section 1320f–1 of this title” for “section 1320f–1(d)(2)(B) of this title”.