---
kind: "section"
citation: "42 U.S.C. § 1320f–1"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1320f–1"
heading: "Selection of negotiation-eligible drugs as selected drugs"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1320f-1"
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–1. Selection of negotiation-eligible drugs as selected drugs

- (a) **In general—** Not later than the selected [drug](/usc/42/11851.md?p=4) publication date with respect to an initial price applicability year, in accordance with [subsection (b)](#b), the [Secretary](/usc/42/1301.md?p=a-6) shall select and publish a list of—
  - (1) with respect to the initial price applicability year 2026, 10 negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in [subparagraph (A)](#d-1-A) of subsection (d)(1), but not [subparagraph (B)](#d-1-B) of such subsection, with respect to such year (or, all (if such number is less than 10) such negotiation-eligible [drugs](/usc/42/11851.md?p=4) with respect to such year);
  - (2) with respect to the initial price applicability year 2027, 15 negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in [subparagraph (A)](#d-1-A) of subsection (d)(1), but not [subparagraph (B)](#d-1-B) of such subsection, with respect to such year (or, all (if such number is less than 15) such negotiation-eligible [drugs](/usc/42/11851.md?p=4) with respect to such year);
  - (3) with respect to the initial price applicability year 2028, 15 negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in subparagraph [(A)](#d-1-A) or [(B)](#d-1-B) of subsection (d)(1) with respect to such year (or, all (if such number is less than 15) such negotiation-eligible [drugs](/usc/42/11851.md?p=4) with respect to such year); and
  - (4) with respect to the initial price applicability year 2029 or a subsequent year, 20 negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in subparagraph [(A)](#d-1-A) or [(B)](#d-1-B) of subsection (d)(1), with respect to such year (or, all (if such number is less than 20) such negotiation-eligible [drugs](/usc/42/11851.md?p=4) with respect to such year).

  Subject to [subsection (c)(2)](#c-2) and [section 1320f–3(f)(5) of this title](/usc/42/1320f–3.md?p=f-5), each [drug](/usc/42/11851.md?p=4) published on the list pursuant to the previous sentence and [subsection (b)(3)](#b-3) shall be subject to the negotiation process under [section 1320f–3 of this title](/usc/42/1320f–3.md) for the negotiation period with respect to such initial price applicability year (and the renegotiation process under such section as applicable for any subsequent year during the applicable price applicability period).

- (b) **Selection of drugs—**
  - (1) **In general—** In carrying out [subsection (a)](#a), subject to [paragraph (2)](#b-2), the [Secretary](/usc/42/1301.md?p=a-6) shall, with respect to an initial price applicability year, do the following:
    - (A) Rank negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in [subsection (d)(1)](#d-1) according to the total expenditures for such [drugs](/usc/42/11851.md?p=4) under parts B and D of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6), during the most recent period of 12 months prior to the selected [drug](/usc/42/11851.md?p=4) publication date (but ending not later than October 31 of the year prior to the year of such [drug](/usc/42/11851.md?p=4) publication date), with respect to such year, for which data are available, with the negotiation-eligible [drugs](/usc/42/11851.md?p=4) with the highest total expenditures being ranked the highest.
    - (B) Select from such ranked [drugs](/usc/42/11851.md?p=4) with respect to such year the negotiation-eligible [drugs](/usc/42/11851.md?p=4) with the highest such rankings.
    - (C) In the case of a biological product for which the inclusion of the biological product as a selected [drug](/usc/42/11851.md?p=4) on a list published under [subsection (a)](#a) has been delayed under [subsection (f)(2)](#f-2), remove such biological product from the rankings under [subparagraph (A)](#b-1-A) before making the selections under [subparagraph (B)](#b-1-B).
  - (2) **High spend part D drugs for 2026 and 2027—** With respect to the initial price applicability year 2026 and with respect to the initial price applicability year 2027, the [Secretary](/usc/42/1301.md?p=a-6) shall apply [paragraph (1)](#b-1) as if the reference to “negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in [subsection (d)(1)](#d-1)” were a reference to “negotiation-eligible [drugs](/usc/42/11851.md?p=4) described in [subsection (d)(1)(A)](#d-1-A)” and as if the reference to “total expenditures for such [drugs](/usc/42/11851.md?p=4) under parts B and D of subchapter XVIII” were a reference to “total expenditures for such [drugs](/usc/42/11851.md?p=4) under part D of subchapter XVIII”.
  - (3) **Inclusion of delayed biological products—** Pursuant to subparagraphs [(B)(ii)(I)](#f-2-B-ii-I) and [(C)(i)](#f-2-C-i) of subsection (f)(2), the [Secretary](/usc/42/1301.md?p=a-6) shall select and include on the list published under [subsection (a)](#a) the biological products described in such subparagraphs. Such biological products shall count towards the required number of [drugs](/usc/42/11851.md?p=4) to be selected under [subsection (a)(1)](#a-1).
- (c) **Selected drug—**
  - (1) **In general—** For purposes of this part, in accordance with [subsection (e)(2)](#e-2) and subject to [paragraph (2)](#c-2), each negotiation-eligible [drug](/usc/42/11851.md?p=4) included on the list published under [subsection (a)](#a) with respect to an initial price applicability year shall be referred to as a “selected [drug](/usc/42/11851.md?p=4)” with respect to such year and each subsequent year beginning before the first year that begins at least 9 months after the date on which the [Secretary](/usc/42/1301.md?p=a-6) determines at least one [drug](/usc/42/11851.md?p=4) or biological product—
    - (A) is approved or licensed (as applicable)—
      - (i) under [section 355(j) of title 21](/usc/21/355.md?p=j) using such [drug](/usc/42/11851.md?p=4) as the listed [drug](/usc/42/11851.md?p=4); or
      - (ii) under [section 262(k) of this title](/usc/42/262.md?p=k) using such [drug](/usc/42/11851.md?p=4) as the reference product; and
    - (B) is marketed pursuant to such approval or licensure.
  - (2) **Clarification—** A negotiation-eligible [drug](/usc/42/11851.md?p=4)—
    - (A) that is included on the list published under [subsection (a)](#a) with respect to an initial price applicability year; and
    - (B) for which the [Secretary](/usc/42/1301.md?p=a-6) makes a determination described in [paragraph (1)](#c-1) before or during the negotiation period with respect to such initial price applicability year;

    shall not be subject to the negotiation process under [section 1320f–3 of this title](/usc/42/1320f–3.md) with respect to such negotiation period and shall continue to be considered a selected [drug](/usc/42/11851.md?p=4) under this part with respect to the number of negotiation-eligible [drugs](/usc/42/11851.md?p=4) published on the list under [subsection (a)](#a) with respect to such initial price applicability year.

- (d) **Negotiation-eligible drug—**
  - (1) **In general—** For purposes of this part, subject to [paragraph (2)](#d-2), the term “negotiation-eligible [drug](/usc/42/11851.md?p=4)” means, with respect to the selected [drug](/usc/42/11851.md?p=4) publication date with respect to an initial price applicability year, a qualifying single source [drug](/usc/42/11851.md?p=4), as defined in [subsection (e)](#e), that is described in either of the following subparagraphs (or, with respect to the initial price applicability year 2026 or 2027, that is described in [subparagraph (A)](#d-1-A)):
    - (A) **Part D high spend drugs—** The qualifying single source [drug](/usc/42/11851.md?p=4) is, determined in accordance with [subsection (e)(2)](#e-2), among the 50 qualifying single source [drugs](/usc/42/11851.md?p=4) with the highest total expenditures under part D of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [paragraph (3)](#d-3), during the most recent 12-month period for which data are available prior to such selected [drug](/usc/42/11851.md?p=4) publication date (but ending no later than October 31 of the year prior to the year of such [drug](/usc/42/11851.md?p=4) publication date).
    - (B) **Part B high spend drugs—** The qualifying single source [drug](/usc/42/11851.md?p=4) is, determined in accordance with [subsection (e)(2)](#e-2), among the 50 qualifying single source [drugs](/usc/42/11851.md?p=4) with the highest total expenditures under part B of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [paragraph (3)](#d-3), during such most recent 12-month period, as described in [subparagraph (A)](#d-1-A).
  - (2) **Exception for small biotech drugs—**
    - (A) **In general—** Subject to [subparagraph (C)](#d-2-C), the term “negotiation-eligible [drug](/usc/42/11851.md?p=4)” shall not include, with respect to the initial price applicability years 2026, 2027, and 2028, a qualifying single source [drug](/usc/42/11851.md?p=4) that meets either of the following:
      - (i) **Part D drugs—** The total expenditures for the qualifying single source [drug](/usc/42/11851.md?p=4) under part D of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [paragraph (3)(B)](#d-3-B), during 2021—
        - (I) are equal to or less than 1 percent of the total expenditures under such part D, as so determined, for all [covered part D drugs](/usc/42/1395w–151.md?p=a-2) (as defined in [section 1395w–102(e) of this title](/usc/42/1395w–102.md?p=e)) during such year; and
        - (II) are equal to at least 80 percent of the total expenditures under such part D, as so determined, for all [covered part D drugs](/usc/42/1395w–151.md?p=a-2) for which the manufacturer of the [drug](/usc/42/11851.md?p=4) has an agreement in effect under [section 1395w–114a of this title](/usc/42/1395w–114a.md) during such year.
      - (ii) **Part B drugs—** The total expenditures for the qualifying single source [drug](/usc/42/11851.md?p=4) under part B of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [paragraph (3)(B)](#d-3-B), during 2021—
        - (I) are equal to or less than 1 percent of the total expenditures under such part B, as so determined, for all qualifying single source [drugs](/usc/42/11851.md?p=4) for which payment may be made under such part B during such year; and
        - (II) are equal to at least 80 percent of the total expenditures under such part B, as so determined, for all qualifying single source [drugs](/usc/42/11851.md?p=4) of the manufacturer for which payment may be made under such part B during such year.
    - (B) **Clarifications relating to manufacturers—**
      - (i) **Aggregation rule—** All [persons](/usc/42/1301.md?p=a-3) treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as one manufacturer for purposes of this paragraph.
      - (ii) **Limitation—** A [drug](/usc/42/11851.md?p=4) shall not be considered to be a qualifying single source [drug](/usc/42/11851.md?p=4) described in clause [(i)](#d-2-A-i) or [(ii)](#d-2-A-ii) of subparagraph (A) if the manufacturer of such [drug](/usc/42/11851.md?p=4) is acquired after 2021 by another manufacturer that does not meet the definition of a specified manufacturer under [section 1395w–114c(g)(4)(B)(ii) of this title](/usc/42/1395w–114c.md?p=g-4-B-ii), effective at the beginning of the plan year immediately following such acquisition or, in the case of an acquisition before 2025, effective January 1, 2025.
    - (C) **Drugs not included as small biotech drugs—** A new formulation, such as an extended release formulation, of a qualifying single source [drug](/usc/42/11851.md?p=4) shall not be considered a qualifying single source [drug](/usc/42/11851.md?p=4) described in [subparagraph (A)](#d-2-A).
  - (3) **Clarifications and determinations—**
    - (A) **Previously selected drugs and small biotech drugs excluded—** In applying subparagraphs [(A)](#d-1-A) and [(B)](#d-1-B) of paragraph (1), the [Secretary](/usc/42/1301.md?p=a-6) shall not consider or count—
      - (i) [drugs](/usc/42/11851.md?p=4) that are already selected [drugs](/usc/42/11851.md?p=4); and
      - (ii) for initial price applicability years 2026, 2027, and 2028, qualifying single source [drugs](/usc/42/11851.md?p=4) described in [paragraph (2)(A)](#d-2-A).
    - (B) **Use of data—** In determining whether a qualifying single source [drug](/usc/42/11851.md?p=4) satisfies any of the criteria described in paragraph [(1)](#d-1) or [(2)](#d-2), the [Secretary](/usc/42/1301.md?p=a-6) shall use data that is aggregated across dosage forms and strengths of the [drug](/usc/42/11851.md?p=4), [including](/usc/42/1301.md?p=b) new formulations of the [drug](/usc/42/11851.md?p=4), such as an extended release formulation, and not based on the specific formulation or package size or package type of the [drug](/usc/42/11851.md?p=4).
- (e) **Qualifying single source drug—**
  - (1) **In general—** For purposes of this part, the term “qualifying single source [drug](/usc/42/11851.md?p=4)” means, with respect to an initial price applicability year, subject to paragraphs [(2)](#e-2) and [(3)](#e-3), a [covered part D drug](/usc/42/1395w–151.md?p=a-2) (as defined in [section 1395w–102(e) of this title](/usc/42/1395w–102.md?p=e)) that is described in any of the following or a [drug](/usc/42/11851.md?p=4) or biological product for which payment may be made under part B of subchapter XVIII that is described in any of the following:
    - (A) **Drug products—** A [drug](/usc/42/11851.md?p=4)—
      - (i) that is approved under [section 355(c) of title 21](/usc/21/355.md?p=c) and is marketed pursuant to such approval;
      - (ii) for which, as of the selected [drug](/usc/42/11851.md?p=4) publication date with respect to such initial price applicability year, at least 7 years will have elapsed since the date of such approval; and
      - (iii) that is not the listed [drug](/usc/42/11851.md?p=4) for any [drug](/usc/42/11851.md?p=4) that is approved and marketed under section 355(j) of such title.
    - (B) **Biological products—** A biological product—
      - (i) that is licensed under [section 262(a) of this title](/usc/42/262.md?p=a) and is marketed under [section 262 of this title](/usc/42/262.md);
      - (ii) for which, as of the selected [drug](/usc/42/11851.md?p=4) publication date with respect to such initial price applicability year, at least 11 years will have elapsed since the date of such licensure; and
      - (iii) that is not the reference product for any biological product that is licensed and marketed under [section 262(k) of this title](/usc/42/262.md?p=k).
  - (2) **Treatment of authorized generic drugs—**
    - (A) **In general—** In the case of a qualifying single source [drug](/usc/42/11851.md?p=4) described in subparagraph [(A)](#e-1-A) or [(B)](#e-1-B) of paragraph (1) that is the listed [drug](/usc/42/11851.md?p=4) (as such term is used in [section 355(j) of title 21](/usc/21/355.md?p=j)) or a product described in [clause (ii)](#e-2-B-ii) of subparagraph (B), with respect to an authorized generic [drug](/usc/42/11851.md?p=4), in applying the provisions of this part, such authorized generic [drug](/usc/42/11851.md?p=4) and such listed [drug](/usc/42/11851.md?p=4) or such product shall be treated as the same qualifying single source [drug](/usc/42/11851.md?p=4).
    - (B) **Authorized generic drug defined—** For purposes of this paragraph, the term “authorized generic [drug](/usc/42/11851.md?p=4)” means—
      - (i) in the case of a [drug](/usc/42/11851.md?p=4), an authorized generic [drug](/usc/42/11851.md?p=4) (as such term is defined in [section 355(t)(3) of title 21](/usc/21/355.md?p=t-3)); and
      - (ii) in the case of a biological product, a product that—
        - (I) has been licensed under [section 262(a) of this title](/usc/42/262.md?p=a);[^1] and
        - (II) is marketed, sold, or distributed directly or indirectly to retail class of trade under a different labeling, packaging (other than repackaging as the reference product in blister packs, unit doses, or similar packaging for use in institutions), product code, labeler code, trade name, or trade mark than the reference product.
  - (3) **Exclusions—** In this part, the term “qualifying single source [drug](/usc/42/11851.md?p=4)” does not include any of the following:
    - (A) **Certain orphan drugs—** A [drug](/usc/42/11851.md?p=4) that is designated as a [drug](/usc/42/11851.md?p=4) for only one rare disease or condition under [section 360bb of title 21](/usc/21/360bb.md) and for which the only approved indication (or indications) is for such disease or condition.
    - (B) **Low spend medicare drugs—** A [drug](/usc/42/11851.md?p=4) or biological product with respect to which the total expenditures under parts B and D of subchapter XVIII, as determined by the [Secretary](/usc/42/1301.md?p=a-6) in accordance with [subsection (d)(3)(B)](#d-3-B)—
      - (i) with respect to initial price applicability year 2026, is less than, during the period beginning on June 1, 2022, and ending on May 31, 2023, $200,000,000;
      - (ii) with respect to initial price applicability year 2027, is less than, during the most recent 12-month period applicable under subparagraphs [(A)](#d-1-A) and [(B)](#d-1-B) of subsection (d)(1) for such year, the dollar amount specified in [clause (i)](#e-3-B-i) increased by the annual percentage increase in the consumer price index for all urban consumers (all items; [United States](/usc/42/1301.md?p=a-2) city average) for the period beginning on June 1, 2023, and ending on September 30, 2024; or
      - (iii) with respect to a subsequent initial price applicability year, is less than, during the most recent 12-month period applicable under subparagraphs [(A)](#d-1-A) and [(B)](#d-1-B) of subsection (d)(1) for such year, the dollar amount specified in this subparagraph for the previous initial price applicability year increased by the annual percentage increase in such consumer price index for the 12-month period ending on September 30 of the year prior to the year of the selected [drug](/usc/42/11851.md?p=4) publication date with respect to such subsequent initial price applicability year.
    - (C) **Plasma-derived products—** A biological product that is derived from human whole blood or plasma.
- (f) **Special rule to delay selection and negotiation of biologics for biosimilar market entry—**
  - (1) **Application—**
    - (A) **In general—** Subject to [subparagraph (B)](#f-1-B), in the case of a biological product that would (but for this subsection) be an extended-monopoly [drug](/usc/42/11851.md?p=4) (as defined in [section 1320f–3(c)(4) of this title](/usc/42/1320f–3.md?p=c-4)) included as a selected [drug](/usc/42/11851.md?p=4) on the list published under [subsection (a)](#a) with respect to an initial price applicability year, the rules described in [paragraph (2)](#f-2) shall apply if the [Secretary](/usc/42/1301.md?p=a-6) determines that there is a high likelihood (as described in [paragraph (3)](#f-3)) that a biosimilar biological product (for which such biological product will be the reference product) will be licensed and marketed under [section 262(k) of this title](/usc/42/262.md?p=k) before the date that is 2 years after the selected [drug](/usc/42/11851.md?p=4) publication date with respect to such initial price applicability year.
    - (B) **Request required—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall not provide for a delay under—
        - (I) [paragraph (2)(A)](#f-2-A) unless a request is made for such a delay by a manufacturer of a biosimilar biological product prior to the selected [drug](/usc/42/11851.md?p=4) publication date for the list published under [subsection (a)](#a) with respect to the initial price applicability year for which the biological product may have been included as a selected [drug](/usc/42/11851.md?p=4) on such list but for subparagraph (2)(A); or
        - (II) [paragraph (2)(B)(iii)](#f-2-B-iii) unless a request is made for such a delay by such a manufacturer prior to the selected [drug](/usc/42/11851.md?p=4) publication date for the list published under [subsection (a)](#a) with respect to the initial price applicability year that is 1 year after the initial price applicability year for which the biological product described in [subsection (a)](#a) would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list but for [paragraph (2)(A)](#f-2-A).
      - (ii) **Information and documents—**
        - (I) **In general—** A request made under [clause (i)](#f-1-B-i) shall be submitted to the [Secretary](/usc/42/1301.md?p=a-6) by such manufacturer at a time and in a form and manner specified by the [Secretary](/usc/42/1301.md?p=a-6), and contain—
          - (aa) information and documents necessary for the [Secretary](/usc/42/1301.md?p=a-6) to make determinations under this subsection, as specified by the [Secretary](/usc/42/1301.md?p=a-6) and [including](/usc/42/1301.md?p=b), to the extent available, items described in [subclause (III)](#f-1-B-ii-III); and
          - (bb) all agreements related to the biosimilar biological product filed with the Federal Trade Commission or the Assistant Attorney General pursuant to subsections (a) and (c) of section 1112 of the Medicare Prescription [Drug](/usc/42/11851.md?p=4), Improvement, and Modernization Act of 2003.
        - (II) **Additional information and documents—** After the [Secretary](/usc/42/1301.md?p=a-6) has reviewed the request and materials submitted under [subclause (I)](#f-1-B-ii-I), the manufacturer shall submit any additional information and documents requested by the [Secretary](/usc/42/1301.md?p=a-6) necessary to make determinations under this subsection.
        - (III) **Items described—** The items described in this clause are the following:
          - (aa) The manufacturing schedule for such biosimilar biological product submitted to the Food and [Drug](/usc/42/11851.md?p=4) [Administration](/usc/42/1301.md?p=a-10) during its review of the application under such [section 262(k) of this title](/usc/42/262.md?p=k).
          - (bb) Disclosures (in filings by the manufacturer of such biosimilar biological product with the Securities and Exchange Commission required under section [78l(b)](/usc/15/78l.md?p=b), [78l(g)](/usc/15/78l.md?p=g), [78m(a)](/usc/15/78m.md?p=a), or [78o(d)](/usc/15/78o.md?p=d) of title 15 about capital investment, revenue expectations, and actions taken by the manufacturer that are typical of the normal course of business in the year (or the 2 years, as applicable) before marketing of a biosimilar biological product) that pertain to the marketing of such biosimilar biological product, or comparable documentation that is distributed to the [shareholders](/usc/42/1301.md?p=a-5) of privately held companies.
    - (C) **Aggregation rule—**
      - (i) **In general—** All [persons](/usc/42/1301.md?p=a-3) treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or in a partnership, shall be treated as one manufacturer for purposes of [paragraph (2)(D)(iv)](#f-2-D-iv).
      - (ii) **Partnership defined—** In [clause (i)](#f-1-C-i), the term “partnership” means a syndicate, group, pool, joint venture, or other organization through or by means of which any business, financial operation, or venture is carried on by the manufacturer of the biological product and the manufacturer of the biosimilar biological product.
  - (2) **Rules described—** The rules described in this paragraph are the following:
    - (A) **Delayed selection and negotiation for 1 year—** If a determination of high likelihood is made under [paragraph (3)](#f-3), the [Secretary](/usc/42/1301.md?p=a-6) shall delay the inclusion of the biological product as a selected [drug](/usc/42/11851.md?p=4) on the list published under [subsection (a)](#a) until such list is published with respect to the initial price applicability year that is 1 year after the initial price applicability year for which the biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list.
    - (B) **If not licensed and marketed during the initial delay—**
      - (i) **In general—** If, during the time period between the selected [drug](/usc/42/11851.md?p=4) publication date on which the biological product would have been included on the list as a selected [drug](/usc/42/11851.md?p=4) pursuant to [subsection (a)](#a) but for [subparagraph (A)](#f-2-A) and the selected [drug](/usc/42/11851.md?p=4) publication date with respect to the initial price applicability year that is 1 year after the initial price applicability year for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list, the [Secretary](/usc/42/1301.md?p=a-6) determines that the biosimilar biological product for which the manufacturer submitted the request under [paragraph (1)(B)(i)(II)](#f-1-B-i-II) (and for which the [Secretary](/usc/42/1301.md?p=a-6) previously made a high likelihood determination under [paragraph (3)](#f-3)) has not been licensed and marketed under [section 262(k) of this title](/usc/42/262.md?p=k), the [Secretary](/usc/42/1301.md?p=a-6) shall, at the request of such manufacturer—
        - (I) reevaluate whether there is a high likelihood (as described in [paragraph (3)](#f-3)) that such biosimilar biological product will be licensed and marketed under such [section 262(k)](/usc/42/262.md?p=k) before the date that is 2 years after the selected [drug](/usc/42/11851.md?p=4) publication date for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list published but for [subparagraph (A)](#f-2-A); and
        - (II) evaluate whether, on the basis of clear and convincing evidence, the manufacturer of such biosimilar biological product has made a significant amount of progress (as determined by the [Secretary](/usc/42/1301.md?p=a-6)) towards both such licensure and the marketing of such biosimilar biological product (based on information from items described in subclauses [(I)(bb)](#f-1-B-ii-I-bb) and [(II)](#f-1-B-ii-II) of paragraph (1)(B)(ii)) since the receipt by the [Secretary](/usc/42/1301.md?p=a-6) of the request made by such manufacturer under [paragraph (1)(B)(i)(I)](#f-1-B-i-I).
      - (ii) **Selection and negotiation—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that there is not a high likelihood that such biosimilar biological product will be licensed and marketed as described in [clause (i)(I)](#f-2-B-i-I) or there has not been a significant amount of progress as described in [clause (i)(II)](#f-2-B-i-II)—
        - (I) the [Secretary](/usc/42/1301.md?p=a-6) shall include the biological product as a selected [drug](/usc/42/11851.md?p=4) on the list published under [subsection (a)](#a) with respect to the initial price applicability year that is 1 year after the initial price applicability year for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list but for [subparagraph (A)](#f-2-A); and
        - (II) the manufacturer of such biological product shall pay a rebate under [paragraph (4)](#f-4) with respect to the year for which such manufacturer would have provided access to a maximum fair price for such biological product but for [subparagraph (A)](#f-2-A).
      - (iii) **Second 1-year delay—** If the [Secretary](/usc/42/1301.md?p=a-6) determines that there is a high likelihood that such biosimilar biological product will be licensed and marketed (as described in [clause (i)(I)](#f-2-B-i-I)) and a significant amount of progress has been made by the manufacturer of such biosimilar biological product towards such licensure and marketing (as described in [clause (i)(II)](#f-2-B-i-II)), the [Secretary](/usc/42/1301.md?p=a-6) shall delay the inclusion of the biological product as a selected [drug](/usc/42/11851.md?p=4) on the list published under [subsection (a)](#a) until the selected [drug](/usc/42/11851.md?p=4) publication date of such list with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list but for this subsection.
    - (C) **If not licensed and marketed during the year two delay—** If, during the time period between the selected [drug](/usc/42/11851.md?p=4) publication date of the list for which the biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) but for [subparagraph (B)(iii)](#f-2-B-iii) and the selected [drug](/usc/42/11851.md?p=4) publication date with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list but for this subsection, the [Secretary](/usc/42/1301.md?p=a-6) determines that such biosimilar biological product has not been licensed and marketed—
      - (i) the [Secretary](/usc/42/1301.md?p=a-6) shall include such biological product as a selected [drug](/usc/42/11851.md?p=4) on such list with respect to the initial price applicability year that is 2 years after the initial price applicability year for which such biological product would have been included as a selected [drug](/usc/42/11851.md?p=4) on such list; and
      - (ii) the manufacturer of such biological product shall pay a rebate under [paragraph (4)](#f-4) with respect to the years for which such manufacturer would have provided access to a maximum fair price for such biological product but for this subsection.
    - (D) **Limitations on delays—**
      - (i) **Limited to 2 years—** In no case shall the [Secretary](/usc/42/1301.md?p=a-6) delay the inclusion of a biological product on the list published under [subsection (a)](#a) for more than 2 years.
      - (ii) **Exclusion of biological products that transitioned to a long-monopoly drug during the delay—** In the case of a biological product for which the inclusion on the list published pursuant to [subsection (a)](#a) was delayed by 1 year under [subparagraph (A)](#f-2-A) and for which there would have been a change in status to a long-monopoly [drug](/usc/42/11851.md?p=4) (as defined in [section 1320f–3(c)(5) of this title](/usc/42/1320f–3.md?p=c-5)) if such biological product had been a selected [drug](/usc/42/11851.md?p=4), in no case may the [Secretary](/usc/42/1301.md?p=a-6) provide for a second 1-year delay under [subparagraph (B)(iii)](#f-2-B-iii).
      - (iii) **Exclusion of biological products if more than 1 year since licensure—** In no case shall the [Secretary](/usc/42/1301.md?p=a-6) delay the inclusion of a biological product on the list published under [subsection (a)](#a) if more than 1 year has elapsed since the biosimilar biological product has been licensed under [section 262(k) of this title](/usc/42/262.md?p=k) and marketing has not commenced for such biosimilar biological product.
      - (iv) **Certain manufacturers of biosimilar biological products excluded—** In no case shall the [Secretary](/usc/42/1301.md?p=a-6) delay the inclusion of a biological product as a selected [drug](/usc/42/11851.md?p=4) on the list published under [subsection (a)](#a) if [Secretary](/usc/42/1301.md?p=a-6) determined that the manufacturer of the biosimilar biological product described in [paragraph (1)(A)](#f-1-A)—
        - (I) is the same as the manufacturer of the reference product described in such paragraph or is treated as being the same pursuant to [paragraph (1)(C)](#f-1-C); or
        - (II) has, based on information from items described in [paragraph (1)(B)(ii)(I)(bb)](#f-1-B-ii-I-bb), entered into any agreement described in such paragraph with the manufacturer of the reference product described in [paragraph (1)(A)](#f-1-A) that—
          - (aa) requires or incentivizes the manufacturer of the biosimilar biological product to submit a request described in [paragraph (1)(B)](#f-1-B); or
          - (bb) restricts the quantity (either directly or indirectly) of the biosimilar biological product that may be sold in the [United States](/usc/42/1301.md?p=a-2) over a specified period of time.
  - (3) **High likelihood—** For purposes of this subsection, there is a high likelihood described in [paragraph (1)](#f-1) or [paragraph (2)](#f-2), as applicable, if the [Secretary](/usc/42/1301.md?p=a-6) finds that—
    - (A) an application for licensure under [section 262(k) of this title](/usc/42/262.md?p=k) for the biosimilar biological product has been accepted for review or approved by the Food and [Drug](/usc/42/11851.md?p=4) [Administration](/usc/42/1301.md?p=a-10); and
    - (B) information from items described in sub clauses[^2] (I)(bb) and (III) of [paragraph (1)(B)(ii)](#f-1-B-ii) submitted to the [Secretary](/usc/42/1301.md?p=a-6) by the manufacturer requesting a delay under such paragraph provides clear and convincing evidence that such biosimilar biological product will, within the time period specified under paragraph [(1)(A)](#f-1-A) or [(2)(B)(i)(I)](#f-2-B-i-I), be marketed.
  - (4) **Rebate—**
    - (A) **In general—** For purposes of subparagraphs [(B)(ii)(II)](#f-2-B-ii-II) and [(C)(ii)](#f-2-C-ii) of paragraph (2), in the case of a biological product for which the inclusion on the list under [subsection (a)](#a) was delayed under this subsection and for which the [Secretary](/usc/42/1301.md?p=a-6) has negotiated and entered into an agreement under [section 1320f–2 of this title](/usc/42/1320f–2.md) with respect to such biological product, the manufacturer shall be required to pay a rebate to the [Secretary](/usc/42/1301.md?p=a-6) at such time and in such manner as determined by the [Secretary](/usc/42/1301.md?p=a-6).
    - (B) **Amount—** Subject to [subparagraph (C)](#f-4-C), the amount of the rebate under [subparagraph (A)](#f-4-A) with respect to a biological product shall be equal to the estimated amount—
      - (i) in the case of a biological product that is a [covered part D drug](/usc/42/1395w–151.md?p=a-2) (as defined in [section 1395w–102(e) of this title](/usc/42/1395w–102.md?p=e)), that is the sum of the products of—
        - (I) 75 percent of the amount by which—
          - (aa) the average manufacturer price, as reported by the manufacturer of such [covered part D drug](/usc/42/1395w–151.md?p=a-2) under [section 1396r–8 of this title](/usc/42/1396r–8.md) (or, if not reported by such manufacturer under [section 1396r–8 of this title](/usc/42/1396r–8.md), as reported by such manufacturer to the [Secretary](/usc/42/1301.md?p=a-6) pursuant to the agreement under [section 1320f–2(a) of this title](/usc/42/1320f–2.md?p=a)) for such biological product, with respect to each of the calendar quarters of the price applicability period that would have applied but for this subsection; exceeds
          - (bb) in the initial price applicability year that would have applied but for a delay under—
            - (AA) [paragraph (2)(A)](#f-2-A), the maximum fair price negotiated under [section 1320f–3 of this title](/usc/42/1320f–3.md) for such biological product under such agreement; or
            - (BB) [paragraph (2)(B)(iii)](#f-2-B-iii), such maximum fair price, increased as described in [section 1320f–4(b)(1)(A) of this title](/usc/42/1320f–4.md?p=b-1-A); and
        - (II) the number of units dispensed under part D of subchapter XVIII for such [covered part D drug](/usc/42/1395w–151.md?p=a-2) during each such calendar quarter of such price applicability period; and
      - (ii) in the case of a biological product for which payment may be made under part B of subchapter XVIII, that is the sum of the products of—
        - (I) 80 percent of the amount by which—
          - (aa) the payment amount for such biological product under [section 1395w–3a(b) of this title](/usc/42/1395w–3a.md?p=b), with respect to each of the calendar quarters of the price applicability period that would have applied but for this subsection; exceeds
          - (bb) in the initial price applicability year that would have applied but for a delay under—
            - (AA) [paragraph (2)(A)](#f-2-A), the maximum fair price negotiated under [section 1320f–3 of this title](/usc/42/1320f–3.md) for such biological product under such agreement; or
            - (BB) [paragraph (2)(B)(iii)](#f-2-B-iii), such maximum fair price, increased as described in [section 1320f–4(b)(1)(A) of this title](/usc/42/1320f–4.md?p=b-1-A); and
        - (II) the number of units (excluding units that are packaged into the payment amount for an item or service and are not separately payable under such part B) of the billing and payment code of such biological product administered or furnished under such part B during each such calendar quarter of such price applicability period.
    - (C) **Special rule for delayed biological products that are long-monopoly drugs—**
      - (i) **In general—** In the case of a biological product with respect to which a rebate is required to be paid under this paragraph, if such biological product qualifies as a long-monopoly [drug](/usc/42/11851.md?p=4) (as defined in [section 1320f–3(c)(5) of this title](/usc/42/1320f–3.md?p=c-5)) at the time of its inclusion on the list published under [subsection (a)](#a), in determining the amount of the rebate for such biological product under [subparagraph (B)](#f-4-B), the amount described in [clause (ii)](#f-4-C-ii) shall be substituted for the maximum fair price described in clause (i)(I) or (ii)(I) of such [subparagraph (B)](#f-4-B), as applicable.
      - (ii) **Amount described—** The amount described in this clause is an amount equal to 65 percent of the average non-Federal average manufacturer price for the biological product for 2021 (or, in the case that there is not an average non-Federal average manufacturer price available for such biological product for 2021, for the first full year following the market entry for such biological product), increased by the percentage increase in the consumer price index for all urban consumers (all items; [United States](/usc/42/1301.md?p=a-2) city average) from September 2021 (or December of such first full year following the market entry), as applicable, to September of the year prior to the selected [drug](/usc/42/11851.md?p=4) publication date with respect to the initial price applicability year that would have applied but for this subsection.
    - (D) **Rebate deposits—** Amounts paid as rebates under this paragraph shall be deposited into—
      - (i) in the case payment is made for such biological product under part B of subchapter XVIII, the Federal Supplementary Medical Insurance Trust Fund established under [section 1395t of this title](/usc/42/1395t.md); and
      - (ii) in the case such biological product is a [covered part D drug](/usc/42/1395w–151.md?p=a-2) (as defined in [section 1395w–102(e) of this title](/usc/42/1395w–102.md?p=e)), the [Medicare Prescription Drug Account](/usc/42/1395w–151.md?p=a-10) under [section 1395w–116 of this title](/usc/42/1395w–116.md) in such Trust Fund.
  - (5) **Definitions of biosimilar biological product—** In this subsection, the term “biosimilar biological product” has the meaning given such term in [section 1395w–3a(c)(6) of this title](/usc/42/1395w–3a.md?p=c-6).

## Footnotes

[^1]: See References in Text note below.
[^2]: So in original.

## Source credit

(Aug. 14, 1935, ch. 531, title XI, § 1192, as added and amended Pub. L. 117–169, title I, §§ 11001(a), 11002(a)(1), Aug. 16, 2022, 136 Stat. 1836, 1854; Pub. L. 119–21, title VII, § 71203(a), July 4, 2025, 139 Stat. 320.)

## Notes

### Amendment of Subsection (e)

Pub. L. 119–21, title VII, § 71203, July 4, 2025, 139 Stat. 321, provided that, applicable with respect to initial price applicability years (as defined in section 1320f(b) of this title) beginning on or after Jan. 1, 2028, subsection (e) of this section is amended as follows:

(1) in paragraph (1), in the matter preceding subparagraph (A), by striking “and (3)” and inserting “through (4)”

(2) in paragraph (3)(A)—

(A) by striking “only one rare disease or condition” and inserting “one or more rare diseases or conditions”; and

(B) by striking “such disease or condition” and inserting “one or more such rare diseases or conditions (as such term is defined in section 360bb(a)(2) of title 21)”; and

(3) by adding at the end the following new paragraph:

“(4) Treatment of former orphan drugs

“In the case of a drug or biological product that, as of the date of the approval or licensure of such drug or biological product, is a drug or biological product described in paragraph (3)(A), paragraph (1)(A)(ii) or (1)(B)(ii) (as applicable) shall apply as if the reference to ‘the date of such approval’ or ‘the date of such licensure’, respectively, were instead a reference to ‘the first day after the date of such approval for which such drug is not a drug described in paragraph (3)(A)’ or ‘the first day after the date of such licensure for which such biological product is not a biological product described in paragraph (3)(A)’, respectively.”

See 2025 Amendment notes below.

### Editorial Notes

### References in Text

Section 52 of the Internal Revenue Code of 1986, referred to in subsecs. (d)(2)(B)(i) and (f)(1)(C)(i), is classified to section 52 of Title 26, Internal Revenue Code.

Section 262(a) of this title, referred to in subsec. (e)(2)(B)(ii)(I), was in the original “section 351(a) of such Act” and was translated as reading “section 351(a) of the Public Health Service Act”, to reflect the probable intent of Congress.

Section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (f)(1)(B)(ii)(I)(bb), is section 1112 of Pub. L. 108–173, which is set out in a note under section 355 of Title 21, Food and Drugs.

### Amendments

2025—Subsec. (e)(1). Pub. L. 119–21, § 71203(a)(1), substituted “through (4)” for “and (3)”.

Subsec. (e)(3)(A). Pub. L. 119–21, § 71203(a)(2), substituted “one or more rare diseases or conditions” for “only one rare disease or condition” and “one or more such rare diseases or conditions (as such term is defined in section 360bb(a)(2) of title 21)” for “such disease or condition”.

Subsec. (e)(4). Pub. L. 119–21, § 71203(a)(3), added par. (4).

2022—Subsec. (a). Pub. L. 117–169, § 11002(a)(1)(A), inserted “and subsection (b)(3)” after “the previous sentence” in concluding provisions.

Subsec. (b)(1)(C). Pub. L. 117–169, § 11002(a)(1)(B)(i), added subpar. (C).

Subsec. (b)(3). Pub. L. 117–169, § 11002(a)(1)(B)(ii), added par. (3).

Subsec. (f). Pub. L. 117–169, § 11002(a)(1)(C), added subsec. (f).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2025 Amendment

Pub. L. 119–21, title VII, § 71203(b), July 4, 2025, 139 Stat. 321, provided that: “The amendments made by subsection (a) [amending this section] shall apply with respect to initial price applicability years (as defined in section 1191(b) of the Social Security Act (42 U.S.C. 1320f(b))) beginning on or after January 1, 2028.”

### Implementation for 2026 Through 2028

Pub. L. 117–169, title I, § 11002(c), Aug. 16, 2022, 136 Stat. 1862, provided that: “The Secretary of Health and Human Services shall implement this section [amending this section and sections 1320f–2, 1320f–5 to 1320f–7, and 1396r–8 of this title], including the amendments made by this section, for 2026, 2027, and 2028 by program instruction or other forms of program guidance.”