---
kind: "section"
citation: "42 U.S.C. § 1320f–2"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1320f–2"
heading: "Manufacturer agreements"
release: "119-102"
url: "https://uscodex.org/usc/42/1320f-2"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XI — General Provisions, Peer Review, and Administrative Simplification"
  - "Part E — Price Negotiation Program To Lower Prices for Certain High-Priced Single Source Drugs"
---

# §1320f–2. Manufacturer agreements

- (a) **In general—** For purposes of [section 1320f(a)(2) of this title](/usc/42/1320f.md?p=a-2), the [Secretary](/usc/42/1301.md?p=a-6) shall enter into [agreements](/usc/42/1320b–8.md?p=a-3-A) with [manufacturers](/usc/42/300aa–33.md?p=3) of selected [drugs](/usc/42/282.md?p=j-1-A-vii) with respect to a [price applicability period](/usc/42/1320f.md?p=b-2), by not later than February 28 following the [selected drug publication date](/usc/42/1320f.md?p=b-3) with respect to such selected [drug](/usc/42/282.md?p=j-1-A-vii), under which—
  - (1) during the [negotiation period](/usc/42/1320f.md?p=b-4) for the [initial price applicability year](/usc/42/1320f.md?p=b-1) for the selected [drug](/usc/42/282.md?p=j-1-A-vii), the [Secretary](/usc/42/1301.md?p=a-6) and the [manufacturer](/usc/42/300aa–33.md?p=3), in accordance with [section 1320f–3 of this title](/usc/42/1320f–3.md), negotiate to determine (and, by not later than the last date of such period, agree to) a [maximum fair price](/usc/42/1320f.md?p=c-3) for such selected [drug](/usc/42/282.md?p=j-1-A-vii) of the [manufacturer](/usc/42/300aa–33.md?p=3) in order for the [manufacturer](/usc/42/300aa–33.md?p=3) to provide access to such price—
    - (A) to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (A) of [section 1320f(c)(2) of this title](/usc/42/1320f.md?p=c-2) and are dispensed such [drug](/usc/42/282.md?p=j-1-A-vii) (and to pharmacies, mail order services, and other dispensers, with respect to such [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who are dispensed such [drugs](/usc/42/282.md?p=j-1-A-vii)) during, subject to [paragraph (2)](#a-2), the [price applicability period](/usc/42/1320f.md?p=b-2); and
    - (B) to [hospitals](/usc/42/1395dd.md?p=e-5), [physicians](/usc/42/1395cc–4.md?p=a-2-E), and other providers of services and [suppliers](/usc/42/1395cc–4.md?p=a-2-I) with respect to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (B) of such section and are furnished or administered such [drug](/usc/42/282.md?p=j-1-A-vii) during, subject to [paragraph (2)](#a-2), the [price applicability period](/usc/42/1320f.md?p=b-2);
  - (2) the [Secretary](/usc/42/1301.md?p=a-6) and the [manufacturer](/usc/42/300aa–33.md?p=3) shall, in accordance with [section 1320f–3 of this title](/usc/42/1320f–3.md), renegotiate (and, by not later than the last date of the period of renegotiation, agree to) the [maximum fair price](/usc/42/1320f.md?p=c-3) for such [drug](/usc/42/282.md?p=j-1-A-vii), in order for the [manufacturer](/usc/42/300aa–33.md?p=3) to provide access to such [maximum fair price](/usc/42/1320f.md?p=c-3) (as so renegotiated)—
    - (A) to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (A) of [section 1320f(c)(2) of this title](/usc/42/1320f.md?p=c-2) and are dispensed such [drug](/usc/42/282.md?p=j-1-A-vii) (and to pharmacies, mail order services, and other dispensers, with respect to such [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who are dispensed such [drugs](/usc/42/282.md?p=j-1-A-vii)) during any year during the [price applicability period](/usc/42/1320f.md?p=b-2) (beginning after such renegotiation) with respect to such selected [drug](/usc/42/282.md?p=j-1-A-vii); and
    - (B) to [hospitals](/usc/42/1395dd.md?p=e-5), [physicians](/usc/42/1395cc–4.md?p=a-2-E), and other providers of services and [suppliers](/usc/42/1395cc–4.md?p=a-2-I) with respect to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (B) of such section and are furnished or administered such [drug](/usc/42/282.md?p=j-1-A-vii) during any year described in [subparagraph (A)](#a-2-A);
  - (3) subject to [subsection (d)](#d), access to the [maximum fair price](/usc/42/1320f.md?p=c-3) ([including](/usc/42/1301.md?p=b) as renegotiated pursuant to [paragraph (2)](#a-2)), with respect to such a selected [drug](/usc/42/282.md?p=j-1-A-vii), shall be provided by the [manufacturer](/usc/42/300aa–33.md?p=3) to—
    - (A) [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2), who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (A) of [section 1320f(c)(2) of this title](/usc/42/1320f.md?p=c-2), at the pharmacy, mail order service, or other dispenser at the point-of-sale of such [drug](/usc/42/282.md?p=j-1-A-vii) (and shall be provided by the [manufacturer](/usc/42/300aa–33.md?p=3) to the pharmacy, mail order service, or other dispenser, with respect to such [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who are dispensed such [drugs](/usc/42/282.md?p=j-1-A-vii)), as described in paragraph [(1)(A)](#a-1-A) or [(2)(A)](#a-2-A), as applicable; and
    - (B) [hospitals](/usc/42/1395dd.md?p=e-5), [physicians](/usc/42/1395cc–4.md?p=a-2-E), and other providers of services and [suppliers](/usc/42/1395cc–4.md?p=a-2-I) with respect to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who with respect to such [drug](/usc/42/282.md?p=j-1-A-vii) are described in subparagraph (B) of such section and are furnished or administered such [drug](/usc/42/282.md?p=j-1-A-vii), as described in paragraph [(1)(B)](#a-1-B) or [(2)(B)](#a-2-B), as applicable;
  - (4) the [manufacturer](/usc/42/300aa–33.md?p=3) submits to the [Secretary](/usc/42/1301.md?p=a-6), in a form and manner specified by the [Secretary](/usc/42/1301.md?p=a-6), for the [negotiation period](/usc/42/1320f.md?p=b-4) for the [price applicability period](/usc/42/1320f.md?p=b-2) (and, if applicable, before any period of renegotiation pursuant to [section 1320f–3(f) of this title](/usc/42/1320f–3.md?p=f)), and for [section 1320f–1(f) of this title](/usc/42/1320f–1.md?p=f), with respect to such [drug](/usc/42/282.md?p=j-1-A-vii)—
    - (A) information on the non-Federal [average manufacturer price](/usc/42/1395w–114b.md?p=g-6) (as defined in [section 8126(h)(5) of title 38](/usc/38/8126.md?p=h-5)) for the [drug](/usc/42/282.md?p=j-1-A-vii) for the applicable year or period;
    - (B) information that the [Secretary](/usc/42/1301.md?p=a-6) requires to carry out the negotiation (or renegotiation process) under this part; and
    - (C) information that the [Secretary](/usc/42/1301.md?p=a-6) requires to carry out [section 1320f–1(f) of this title](/usc/42/1320f–1.md?p=f), [including](/usc/42/1301.md?p=b) rebates under [paragraph (4)](/usc/42/1320f–1.md?p=f-4) of such section; and
  - (5) the [manufacturer](/usc/42/300aa–33.md?p=3) complies with requirements determined by the [Secretary](/usc/42/1301.md?p=a-6) to be necessary for purposes of administering the [program](/usc/42/274l–1.md?p=4) and monitoring compliance with the [program](/usc/42/274l–1.md?p=4).
- (b) **Agreement in effect until drug is no longer a selected drug—** An [agreement](/usc/42/1320b–8.md?p=a-3-A) entered into under this section shall be effective, with respect to a selected [drug](/usc/42/282.md?p=j-1-A-vii), until such [drug](/usc/42/282.md?p=j-1-A-vii) is no longer considered a selected [drug](/usc/42/282.md?p=j-1-A-vii) under [section 1320f–1(c) of this title](/usc/42/1320f–1.md?p=c).
- (c) **Confidentiality of information—** Information submitted to the [Secretary](/usc/42/1301.md?p=a-6) under this part by a [manufacturer](/usc/42/300aa–33.md?p=3) of a selected [drug](/usc/42/282.md?p=j-1-A-vii) that is proprietary information of such [manufacturer](/usc/42/300aa–33.md?p=3) (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) shall be used only by the [Secretary](/usc/42/1301.md?p=a-6) or disclosed to and used by the Comptroller General of the [United States](/usc/42/1301.md?p=a-2) for purposes of carrying out this part.
- (d) **Nonduplication with 340B ceiling price—** Under an [agreement](/usc/42/1320b–8.md?p=a-3-A) entered into under this section, the [manufacturer](/usc/42/300aa–33.md?p=3) of a selected [drug](/usc/42/282.md?p=j-1-A-vii)—
  - (1) shall not be required to provide access to the [maximum fair price](/usc/42/1320f.md?p=c-3) under [subsection (a)(3)](#a-3), with respect to such selected [drug](/usc/42/282.md?p=j-1-A-vii) and [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who are eligible to be furnished, administered, or dispensed such selected [drug](/usc/42/282.md?p=j-1-A-vii) at a covered entity described in section 340B(a)(4) of the Public Health Service Act [[42 U.S.C. 256b(a)(4)](/usc/42/256b.md?p=a-4)], to such covered entity if such selected [drug](/usc/42/282.md?p=j-1-A-vii) is subject to an [agreement](/usc/42/1320b–8.md?p=a-3-A) described in section 340B(a)(1) of such Act [[42 U.S.C. 256b(a)(1)](/usc/42/256b.md?p=a-1)] and the ceiling price (defined in section 340B(a)(1) of such Act [[42 U.S.C. 256b(a)(1)](/usc/42/256b.md?p=a-1)]) is lower than the [maximum fair price](/usc/42/1320f.md?p=c-3) for such selected [drug](/usc/42/282.md?p=j-1-A-vii); and
  - (2) shall be required to provide access to the [maximum fair price](/usc/42/1320f.md?p=c-3) to such covered entity with respect to [maximum fair price eligible individuals](/usc/42/1320f.md?p=c-2) who are eligible to be furnished, administered, or dispensed such selected [drug](/usc/42/282.md?p=j-1-A-vii) at such entity at such ceiling price in a nonduplicated amount to the ceiling price if such [maximum fair price](/usc/42/1320f.md?p=c-3) is below the ceiling price for such selected [drug](/usc/42/282.md?p=j-1-A-vii).

## Source credit

(Aug. 14, 1935, ch. 531, title XI, § 1193, as added and amended Pub. L. 117–169, title I, §§ 11001(a), 11002(a)(2), Aug. 16, 2022, 136 Stat. 1841, 1861.)

## Notes

### 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).