42 U.S.C. § 1320f–2: Manufacturer agreements

Summary

The Secretary must make price agreements with a drug’s maker by February 28 after the drug is named a selected drug. The maker and the Secretary must negotiate, and by the end of the negotiation period agree on a maximum fair price for the drug. They must also renegotiate and agree on that price in later renegotiation periods. The agreed price must be available to two groups: people who get the drug at pharmacies or by mail (and those pharmacies or dispensers), and people who get the drug in hospitals or from doctors and other providers. The price must be provided at the point of sale and to the providers who give or administer the drug. The maker must give the Secretary information needed for the talks, including the non‑Federal average manufacturer price and rebate data, in the form the Secretary requires. The maker must follow rules the Secretary sets to run and check the program. The agreement stays in effect until the drug is no longer a selected drug. Any proprietary data the maker gives the Secretary can only be used by the Secretary or shared with the Comptroller General for running the program. If a 340B covered entity already gets a lower 340B ceiling price, the maker does not have to offer the maximum fair price there; if the maximum fair price is lower than the 340B ceiling, the maker must provide the lower amount without duplicating the 340B benefit.

Title 42, §1320f–2

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

(a)In general

For purposes of section 1320f(a)(2) of this title, the Secretary shall enter into agreements with manufacturers of selected drugs with respect to a price applicability period, by not later than February 28 following the selected drug publication date with respect to such selected drug, under which—

(1)during the negotiation period for the initial price applicability year for the selected drug, the Secretary and the manufacturer, in accordance with section 1320f–3 of this title, negotiate to determine (and, by not later than the last date of such period, agree to) a maximum fair price for such selected drug of the manufacturer in order for the manufacturer to provide access to such price—

(A)to maximum fair price eligible individuals who with respect to such drug are described in subparagraph (A) of section 1320f(c)(2) of this title and are dispensed such drug (and to pharmacies, mail order services, and other dispensers, with respect to such maximum fair price eligible individuals who are dispensed such drugs) during, subject to paragraph (2), the price applicability period; and

(B)to hospitals, physicians, and other providers of services and suppliers with respect to maximum fair price eligible individuals who with respect to such drug are described in subparagraph (B) of such section and are furnished or administered such drug during, subject to paragraph (2), the price applicability period;

(2)the Secretary and the manufacturer shall, in accordance with section 1320f–3 of this title, renegotiate (and, by not later than the last date of the period of renegotiation, agree to) the maximum fair price for such drug, in order for the manufacturer to provide access to such maximum fair price (as so renegotiated)—

(A)to maximum fair price eligible individuals who with respect to such drug are described in subparagraph (A) of section 1320f(c)(2) of this title and are dispensed such drug (and to pharmacies, mail order services, and other dispensers, with respect to such maximum fair price eligible individuals who are dispensed such drugs) during any year during the price applicability period (beginning after such renegotiation) with respect to such selected drug; and

(3)subject to subsection (d), access to the maximum fair price (including as renegotiated pursuant to paragraph (2)), with respect to such a selected drug, shall be provided by the manufacturer to—

(A)maximum fair price eligible individuals, who with respect to such drug are described in subparagraph (A) of section 1320f(c)(2) of this title, at the pharmacy, mail order service, or other dispenser at the point-of-sale of such drug (and shall be provided by the manufacturer to the pharmacy, mail order service, or other dispenser, with respect to such maximum fair price eligible individuals who are dispensed such drugs), as described in paragraph (1)(A) or (2)(A), as applicable; and

(B)hospitals, physicians, and other providers of services and suppliers with respect to maximum fair price eligible individuals who with respect to such drug are described in subparagraph (B) of such section and are furnished or administered such drug, as described in paragraph (1)(B) or (2)(B), as applicable;

(4)the manufacturer submits to the Secretary, in a form and manner specified by the Secretary, for the negotiation period for the price applicability period (and, if applicable, before any period of renegotiation pursuant to section 1320f–3(f) of this title), and for section 1320f–1(f) of this title, with respect to such drug—

(A)information on the non-Federal average manufacturer price (as defined in section 8126(h)(5) of title 38) for the drug for the applicable year or period;

(B)information that the Secretary requires to carry out the negotiation (or renegotiation process) under this part; and

(C)information that the Secretary requires to carry out section 1320f–1(f) of this title, including rebates under paragraph (4) of such section; and

(5)the manufacturer complies with requirements determined by the Secretary to be necessary for purposes of administering the program and monitoring compliance with the program.

(b)Agreement in effect until drug is no longer a selected drug

An agreement entered into under this section shall be effective, with respect to a selected drug, until such drug is no longer considered a selected drug under section 1320f–1(c) of this title.

(c)Confidentiality of information

Information submitted to the Secretary under this part by a manufacturer of a selected drug that is proprietary information of such manufacturer (as determined by the Secretary) shall be used only by the Secretary or disclosed to and used by the Comptroller General of the United States for purposes of carrying out this part.

(d)Nonduplication with 340B ceiling price

Under an agreement entered into under this section, the manufacturer of a selected drug—

(1)shall not be required to provide access to the maximum fair price under subsection (a)(3), with respect to such selected drug and maximum fair price eligible individuals who are eligible to be furnished, administered, or dispensed such selected drug at a covered entity described in section 340B(a)(4) of the Public Health Service Act [42 U.S.C. 256b(a)(4)], to such covered entity if such selected drug is subject to an agreement described in section 340B(a)(1) of such Act [42 U.S.C. 256b(a)(1)] and the ceiling price (defined in section 340B(a)(1) of such Act [42 U.S.C. 256b(a)(1)]) is lower than the maximum fair price for such selected drug; and

(2)shall be required to provide access to the maximum fair price to such covered entity with respect to maximum fair price eligible individuals who are eligible to be furnished, administered, or dispensed such selected drug at such entity at such ceiling price in a nonduplicated amount to the ceiling price if such maximum fair price is below the ceiling price for such selected drug.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2022—Subsec. (a)(4). Pub. L. 117–169, § 11002(a)(2)(A), inserted “, and for section 1320f–1(f) of this title,” after “section 1320f–3(f) of this title)” in introductory provisions. Subsec. (a)(4)(C). Pub. L. 117–169, § 11002(a)(2)(B), (C), added subpar. (C).

§1320f–2 Manufacturer Agreements

Summary

Title 42, §1320f–2

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata