---
kind: "section"
citation: "42 C.F.R. § 423.1000"
title: "42"
number: "423.1000"
heading: "Basis and scope."
url: "https://uscodex.org/cfr/42/423.1000"
---

# §423.1000. Basis and scope.

- (a) **Statutory basis.**
  - (1) Section 1128A(c)(2) of the Act provides that the Secretary may not collect a civil money penalty until the affected party has had notice and opportunity for a hearing.
  - (2) Section 1857 (g) of the Act provides that, for Part D sponsors found to be out of compliance with the requirements in [part 423](/cfr/42/part423.md), specified remedies may be imposed instead of, or in addition to, termination of the Part D sponsor's contract. Section 1857(g)(4) of the Act makes certain provisions of section 1128A of the Act applicable to civil money penalties imposed on Part D sponsors.
  - (3)
    - (i) CMS must impose a civil money penalty on a manufacturer that fails to provide applicable discounts for applicable drugs of the manufacturer dispensed to applicable beneficiaries in accordance with the terms of such manufacturer's—
      - (A) Coverage Gap Discount Program agreement, in accordance with section 1860D-14A(e)(2) of the Act; and
      - (B) **Manufacturer Discount Program agreement, in accordance with section 1860D-14C(e) of the Act.**
    - (ii) The provisions of [section 1128A](/cfr/42/1128A.md) (other than subsections [(a)](#a) and [(b)](#b)) of the Act apply to a civil money penalty under [paragraph (a)(3)(i)](#a-3-i) of this section.
- (b) [Reserved]

## Notes

### Amendments

[72 FR 68736, Dec. 5, 2007, as amended 77 FR 22171, Apr. 12, 2012; 91 FR 17591, Apr. 6, 2026]

### Source

Source: 72 FR 68736, Dec. 5, 2007, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh.

### Source

Source: 70 FR 4525, Jan. 28, 2005, unless otherwise noted.

### Amendments

[72 FR 68736, Dec. 5, 2007, as amended 77 FR 22171, Apr. 12, 2012; 91 FR 17591, Apr. 6, 2026]