§1395w–102. Prescription drug benefits — Inbound Citations

(1) Subsections (a)(1) and (d)(1) of section 1395w–102 of this title and section 1395w–104(b)(2)(A) of this title shall not be construed to require the plan to provide negotiated prices (described in subsection (d)(1)(B) of such section), but shall apply to the extent the plan does so.

(1) Subject to the succeeding provisions of this part, each part D eligible individual (as defined in paragraph (3)(A)) is entitled to obtain qualified prescription drug coverage (described in section 1395w–102(a) of this title) as follows:

(A) A part D eligible individual who is not enrolled in an MA plan may obtain qualified prescription drug coverage through enrollment in a prescription drug plan (as defined in section 1395w–151(a)(14) of this title).

(i) A part D eligible individual who is enrolled in an MA–PD plan obtains such coverage through such plan.

(ii) Except as provided in clauses (iii) and (iv), a part D eligible individual who is enrolled in an MA plan may not enroll in a prescription drug plan under this part.

(iii) A part D eligible individual who is enrolled in an MA private fee-for-service plan (as defined in section 1395w–28(b)(2) of this title) that does not provide qualified prescription drug coverage may obtain qualified prescription drug coverage through enrollment in a prescription drug plan.

(iv) A part D eligible individual who is enrolled in an MSA plan (as defined in section 1395w–28(b)(3) of this title) may obtain qualified prescription drug coverage through enrollment in a prescription drug plan.

(15) The term “qualified prescription drug coverage” is defined in section 1395w–102(a)(1) of this title.

(A) only offers the standard prescription drug coverage and access to negotiated prices described in section 1395w–102(a)(1)(A) of this title and does not include any supplemental prescription drug coverage; and

(ii) The Secretary determines that the portion of the bid submitted under subsection (b) that is attributable to supplemental prescription drug coverage pursuant to section 1395w–102(a)(2) of this title is supported by the actuarial bases provided under such subsection and reasonably and equitably reflects the revenue requirements (as used for purposes of section 300e–1(8)(C) of this title) for such coverage under the plan.

(1) The term “basic prescription drug coverage” is defined in section 1395w–102(a)(3) of this title.

(A) an actuarial valuation of standard prescription drug coverage under section 1395w–102(b) of this title;

(C) For a year preceding 2025, the continuation of coverage from the initial coverage limit (under paragraph (3) of section 1395w–102(b) of this title) for expenditures incurred through the total amount of expenditures at which benefits are available under paragraph (4) of such section, subject to the reduced cost-sharing described in subparagraph (D).

(B) Subject to paragraphs (8) and (9) of section 1395w–102(b) of this title, a reduction in the annual deductible applicable under section 1395w–102(b)(1) of this title to $50.

(C) The continuation of coverage from the initial coverage limit (under paragraph (3) of section 1395w–102(b) of this title) for expenditures incurred through the total amount of expenditures at which benefits are available under paragraph (4) of such section, subject to the reduced coinsurance described in subparagraph (D).

(i) the application of a coinsurance of 25 percent of the negotiated price, as applied under paragraph (2)(A) of section 1395w–102(b) of this title, for costs described in such paragraph; or

(1) In addition to amounts otherwise payable under this section to a PDP sponsor of a prescription drug plan or an MA organization offering an MA–PD plan, for plan year 2023, the Secretary shall provide the PDP sponsor or MA organization offering the plan subsidies in an amount equal to the aggregate reduction in cost-sharing and deductible by reason of the application of paragraph (8) or (9) of section 1395w–102(b) of this title for individuals under the plan during the year.

(ii) The cost threshold and cost limit amounts specified in subclauses (I) and (II) of clause (i) for a plan year that ends after 2006 shall be adjusted in the same manner as the annual deductible and the annual out-of-pocket threshold, respectively, are annually adjusted under paragraphs (1) and (4)(B) of section 1395w–102(b) of this title.

(16) The term “standard prescription drug coverage” is defined in section 1395w–102(b) of this title.

(B) A reduction in the annual deductible applicable under section 1395w–102(b)(1) of this title to $0.

(B) Subject to paragraphs (8) and (9) of section 1395w–102(b) of this title, a reduction in the annual deductible applicable under section 1395w–102(b)(1) of this title to $50.

(A) the deductible under section 1395w–102(b)(1) of this title shall not apply; and

(C) has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that exceed the annual deductible specified in section 1395w–102(b)(1) of this title.

(i) In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall above the annual deductible specified in section 1395w–102(b)(1) of this title for the year, the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls above such annual deductible.

(i) In the case of an individual who is a full-benefit dual eligible individual and who is an institutionalized individual or couple (as defined in section 1396a(q)(1)(B) of this title) or, effective on a date specified by the Secretary (but in no case earlier than January 1, 2012), who would be such an institutionalized individual or couple, if the full-benefit dual eligible individual were not receiving services under a home and community-based waiver authorized for a State under section 1315 of this title or subsection (c) or (d) of section 1396n of this title or under a State plan amendment under subsection (i) of such section or services provided through enrollment in a medicaid managed care organization with a contract under section 1396b(m) of this title or under section 1396u–2 of this title, the elimination of any beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title).

(ii) Subject to paragraph (6), in the case of an individual not described in clause (i) who is a full-benefit dual eligible individual and whose income does not exceed 100 percent of the poverty line applicable to a family of the size involved, the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed—

(I) for a plan year before 2028—

(aa) for a generic drug or a preferred drug that is a multiple source drug (as defined in section 1396r–8(k)(7)(A)(i) of this title), $1 or, if less, the copayment amount applicable to an individual under clause (iii); and

(bb) for any other drug, $3 or, if less, the copayment amount applicable to an individual under clause (iii); and

(II) for plan year 2028 and each subsequent plan year—

(aa) for a generic drug, $0;

(bb) for a preferred drug that is a multiple source drug (as defined in section 1396r–8(k)(7)(A)(i) of this title), the dollar amount applied under this clause for such a drug for the preceding plan year, increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such preceding year, or, if less, the copayment amount applicable to an individual under clause (iii); and

(cc) for a drug not described in either item (aa) or (bb), the dollar amount applied under this clause for such a drug for the preceding plan year, increased in the manner specified in item (bb), or, if less, the copayment amount applicable to an individual under clause (iii).

(iii) Subject to paragraph (6), in the case of an individual not described in clause (i) or (ii), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed the copayment amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023 and subsequent plan years, the copayment amount applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(D) Subject to paragraph (6), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts above the deductible under subparagraph (B) through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of coinsurance of “15 percent” instead of coinsurance of “25 percent” in section 1395w–102(b)(2) of this title. For plan year 2023, the amount of the coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(i) has reached or exceeded the initial coverage limit under section 1395w–102(b)(3) of this title during the year; and

(C) In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the initial coverage limit under section 1395w–102(b)(3) of this title and below the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title for the year, the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such initial coverage limit and below such annual out-of-pocket threshold.

(i) for years prior to 2025, any discount or coverage provided during the gap in prescription drug coverage that occurs between the initial coverage limit under section 1395w–102(b)(3) of this title during the year and the out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title; and

(6) The term “initial coverage limit” means such limit as established under section 1395w–102(b)(3) of this title for a year before 2025, or, in the case of coverage that is not standard prescription drug coverage, the comparable limit (if any) established under the coverage for such year.

(1) In the case of an individual described in subparagraphs (A) through (D) of section 1395w–114a(g)(1) of this title who as of the last day of a calendar quarter in 2010 has incurred costs for covered part D drugs so that the individual has exceeded the initial coverage limit under section 1395w–102(b)(3) of this title for 2010, the Secretary shall provide for payment from the Medicare Prescription Drug Account of $250 to the individual by not later than the 15th day of the third month following the end of such quarter.

(C) For a year preceding 2025, the continuation of coverage from the initial coverage limit (under paragraph (3) of section 1395w–102(b) of this title) for expenditures incurred through the total amount of expenditures at which benefits are available under paragraph (4) of such section, subject to the reduced cost-sharing described in subparagraph (D).

(i) In the case of an individual who is a full-benefit dual eligible individual and who is an institutionalized individual or couple (as defined in section 1396a(q)(1)(B) of this title) or, effective on a date specified by the Secretary (but in no case earlier than January 1, 2012), who would be such an institutionalized individual or couple, if the full-benefit dual eligible individual were not receiving services under a home and community-based waiver authorized for a State under section 1315 of this title or subsection (c) or (d) of section 1396n of this title or under a State plan amendment under subsection (i) of such section or services provided through enrollment in a medicaid managed care organization with a contract under section 1396b(m) of this title or under section 1396u–2 of this title, the elimination of any beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title).

(ii) Subject to paragraph (6), in the case of an individual not described in clause (i) who is a full-benefit dual eligible individual and whose income does not exceed 100 percent of the poverty line applicable to a family of the size involved, the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed—

(I) for a plan year before 2028—

(aa) for a generic drug or a preferred drug that is a multiple source drug (as defined in section 1396r–8(k)(7)(A)(i) of this title), $1 or, if less, the copayment amount applicable to an individual under clause (iii); and

(bb) for any other drug, $3 or, if less, the copayment amount applicable to an individual under clause (iii); and

(II) for plan year 2028 and each subsequent plan year—

(aa) for a generic drug, $0;

(bb) for a preferred drug that is a multiple source drug (as defined in section 1396r–8(k)(7)(A)(i) of this title), the dollar amount applied under this clause for such a drug for the preceding plan year, increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such preceding year, or, if less, the copayment amount applicable to an individual under clause (iii); and

(cc) for a drug not described in either item (aa) or (bb), the dollar amount applied under this clause for such a drug for the preceding plan year, increased in the manner specified in item (bb), or, if less, the copayment amount applicable to an individual under clause (iii).

(iii) Subject to paragraph (6), in the case of an individual not described in clause (i) or (ii), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed the copayment amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023 and subsequent plan years, the copayment amount applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(C) The continuation of coverage from the initial coverage limit (under paragraph (3) of section 1395w–102(b) of this title) for expenditures incurred through the total amount of expenditures at which benefits are available under paragraph (4) of such section, subject to the reduced coinsurance described in subparagraph (D).

(D) Subject to paragraph (6), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts above the deductible under subparagraph (B) through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of coinsurance of “15 percent” instead of coinsurance of “25 percent” in section 1395w–102(b)(2) of this title. For plan year 2023, the amount of the coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(E) Application of the protection against high out-of-pocket expenditures under section 1395w–102(b)(4) of this title.

(E) For a year preceding 2024, the elimination of any cost-sharing imposed under section 1395w–102(b)(4)(A) of this title or under section 1395w–102(b)(9) of this title in the case of a covered insulin product (as defined in subparagraph (C) of such section).

(E) Subject to paragraph (6) of this subsection and subsection (c), the substitution for the cost-sharing imposed under section 1395w–102(b)(4)(A) of this title of a copayment or coinsurance not to exceed the copayment or coinsurance amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023, the amount of the copayment or coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(iii) Subject to paragraph (6), in the case of an individual not described in clause (i) or (ii), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed the copayment amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023 and subsequent plan years, the copayment amount applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(E) Subject to paragraph (6) of this subsection and subsection (c), the substitution for the cost-sharing imposed under section 1395w–102(b)(4)(A) of this title of a copayment or coinsurance not to exceed the copayment or coinsurance amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023, the amount of the copayment or coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(ii) has not incurred costs for covered part D drugs in the year equal to the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title.

(C) In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the initial coverage limit under section 1395w–102(b)(3) of this title and below the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title for the year, the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above such initial coverage limit and below such annual out-of-pocket threshold.

(A) for a year preceding 2025, 80 percent of the allowable reinsurance costs (as specified in paragraph (2)) attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title; and

(i) with respect to applicable drugs (as defined in section 1395w–114c(g)(2) of this title), an amount equal to 20 percent of such allowable reinsurance costs attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title; and

(ii) with respect to covered part D drugs that are not applicable drugs (as so defined), an amount equal to 40 percent of such allowable reinsurance costs attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title.

(i) for years prior to 2025, any discount or coverage provided during the gap in prescription drug coverage that occurs between the initial coverage limit under section 1395w–102(b)(3) of this title during the year and the out-of-pocket threshold specified in section 1395w–102(b)(4)(B) of this title; and

(i) who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year, 90 percent of the negotiated price of such drug; and

(I) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent; and

(ee) for 2029 and each subsequent year, 90 percent; and

(II) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent;

(ee) for 2029, 90 percent;

(ff) for 2030, 85 percent; and

(gg) for 2031 and each subsequent year, 80 percent.

(I) for an applicable drug dispensed for an applicable beneficiary who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent; and

(ee) for 2029 and each subsequent year, 90 percent; and

(II) for an applicable drug dispensed for an applicable beneficiary who has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent;

(ee) for 2029, 90 percent;

(ff) for 2030, 85 percent; and

(gg) for 2031 and each subsequent year, 80 percent.

(ii) In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall entirely below or entirely above the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year, the manufacturer of the applicable drug shall provide the discounted price—

(I) in accordance with subparagraph (A)(i) on the portion of the negotiated price of the applicable drug that falls below such threshold; and

(II) in accordance with subparagraph (A)(ii) on the portion of such price of such drug that falls at or above such threshold.

With respect to covered part D drugs that would be applicable drugs (as defined in section 1395w–114c(g)(2) of this title) but for the application of subparagraph (B) of such section, the Secretary shall provide a process whereby, in the case of an applicable beneficiary (as defined in section 1395w–114c(g)(1) of this title) who, with respect to a year, is enrolled in a prescription drug plan or is enrolled in an MA–PD plan, has not incurred costs that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title, and is dispensed such a drug, the Secretary (periodically and on a timely basis) provides the PDP sponsor or the MA organization offering the plan, a subsidy with respect to such drug that is equal to 10 percent of the negotiated price (as defined in section 1395w–114c(g)(6) of this title) of such drug.

(B) when prescription drug benefits are provided under this part, a notice of the benefits in relation to—

(i) for a year preceding 2025, the initial coverage limit for the current year; and

(ii) the annual out-of-pocket threshold for the current year.

Notices under subparagraph (B) need not be provided more often than as specified by the Secretary and notices under subparagraph (B)(ii) shall take into account the application of section 1395w–102(b)(4)(C) of this title to the extent practicable, as specified by the Secretary.

(C) has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that exceed the annual deductible specified in section 1395w–102(b)(1) of this title.

(i) who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year, 90 percent of the negotiated price of such drug; and

(I) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent; and

(ee) for 2029 and each subsequent year, 90 percent; and

(II) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent;

(ee) for 2029, 90 percent;

(ff) for 2030, 85 percent; and

(gg) for 2031 and each subsequent year, 80 percent.

(I) for an applicable drug dispensed for an applicable beneficiary who has not incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent; and

(ee) for 2029 and each subsequent year, 90 percent; and

(II) for an applicable drug dispensed for an applicable beneficiary who has incurred costs, as determined in accordance with section 1395w–102(b)(4)(C) of this title, for covered part D drugs in the year that are equal to or exceed the annual out-of-pocket threshold specified in section 1395w–102(b)(4)(B)(i) of this title for the year—

(aa) for 2025, 99 percent;

(bb) for 2026, 98 percent;

(cc) for 2027, 95 percent;

(dd) for 2028, 92 percent;

(ee) for 2029, 90 percent;

(ff) for 2030, 85 percent; and

(gg) for 2031 and each subsequent year, 80 percent.

(3) If a PDP sponsor determines that a plan provides coverage for a covered part D drug that is not on the formulary of the plan, the drug shall be treated as being included on the formulary for purposes of section 1395w–102(b)(4)(C)(i) of this title.

(7) The exclusion of costs incurred for covered part D drugs which are not included (or treated as being included) in a plan’s formulary under section 1395w–102(b)(4)(C)(i) of this title shall not apply insofar as the plan does not utilize a formulary.

(4) In applying section 1395w–102(b)(4)(C)(ii) of this title, expenses incurred under a State Pharmaceutical Assistance Program may be counted toward the annual out-of-pocket threshold.

(2) To the extent specified by the Secretary, the requirements referred to in paragraph (1) shall apply to procedures established under section 1395w–102(b)(4)(D) of this title.

(A) The Secretary may impose user fees for the transmittal of information necessary for benefit coordination under section 1395w–102(b)(4)(D) of this title in a manner similar to the manner in which user fees are imposed under section 1395u(h)(3)(B) of this title, except that the Secretary may retain a portion of such fees to defray the Secretary’s costs in carrying out procedures under section 1395w–102(b)(4)(D) of this title.

(2) The requirements of this section shall not affect the application of the procedures established under section 1395w–102(b)(4)(D) of this title.

(B) the part D annual growth rate under section 1860D–2(b)(6) [42 U.S.C. 1395w–102(b)(6)]; and

(i) for 2007 shall be the dollar amount specified in such paragraph increased by the annual percentage increase described in section 1395w–102(b)(6) of this title for 2007; or

(ii) for a subsequent year shall be the dollar amount specified in this clause (or clause (i)) for the previous year increased by the annual percentage increase described in section 1395w–102(b)(6) of this title for the year involved.

(B) a succeeding year, is the annual percentage increase specified in section 1395w–102(b)(6) of this title for the year.

(iii) a subsequent year, is equal to the aggregate amount specified in this subparagraph for the previous year increased by annual percentage increase specified in section 1395w–102(b)(6) of this title for the year involved.

(6) For plan years beginning on or after January 1, 2023, with respect to an adult vaccine recommended by the Advisory Committee on Immunization Practices (as defined in section 1395w–102(b)(8)(B) of this title)—

(A) the deductible under section 1395w–102(b)(1) of this title shall not apply; and

(B) there shall be no cost-sharing under this section with respect to such vaccine.

(E) For a year preceding 2024, the elimination of any cost-sharing imposed under section 1395w–102(b)(4)(A) of this title or under section 1395w–102(b)(9) of this title in the case of a covered insulin product (as defined in subparagraph (C) of such section).

(iii) Subject to paragraph (6), in the case of an individual not described in clause (i) or (ii), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of a copayment amount that does not exceed the copayment amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023 and subsequent plan years, the copayment amount applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(E) For a year preceding 2024, the elimination of any cost-sharing imposed under section 1395w–102(b)(4)(A) of this title or under section 1395w–102(b)(9) of this title in the case of a covered insulin product (as defined in subparagraph (C) of such section).

(D) Subject to paragraph (6), the substitution for the beneficiary coinsurance described in section 1395w–102(b)(2) of this title (for all amounts above the deductible under subparagraph (B) through the total amount of expenditures at which benefits are available under section 1395w–102(b)(4) of this title) of coinsurance of “15 percent” instead of coinsurance of “25 percent” in section 1395w–102(b)(2) of this title. For plan year 2023, the amount of the coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(E) Subject to paragraph (6) of this subsection and subsection (c), the substitution for the cost-sharing imposed under section 1395w–102(b)(4)(A) of this title of a copayment or coinsurance not to exceed the copayment or coinsurance amount specified under section 1395w–102(b)(4)(A)(i)(I)(aa) of this title for the drug and year involved. For plan year 2023, the amount of the copayment or coinsurance applicable under the preceding sentence to a month’s supply of a covered insulin product (as defined in section 1395w–102(b)(9)(C) of this title) dispensed to the individual may not exceed the applicable copayment amount for the product under the prescription drug plan or MA–PD plan in which the individual is enrolled.

(B) The Secretary determines that the plan and PDP sponsor meet the requirements under this part relating to actuarial determinations, including such requirements under section 1395w–102(c) of this title.

(B) actuarial valuations relating to alternative prescription drug coverage under section 1395w–102(c)(1) of this title;

(A) The PDP sponsor of a prescription drug plan shall issue (and reissue, as appropriate) such a card (or other technology) that may be used by an enrollee to assure access to negotiated prices under section 1395w–102(d) of this title.

(i) payment for the actual costs (taking into account negotiated price concessions described in section 1395w–102(d)(1)(B) of this title) of covered part D drugs provided to part D eligible individuals enrolled in a fallback prescription drug plan offered by the entity; and

(6) The term “negotiated price” has the meaning given such term for purposes of section 1395w–102(d)(1)(B) of this title, and, with respect to an applicable drug, such negotiated price shall include any dispensing fee and, if applicable, any vaccine administration fee for the applicable drug.

(D) Notwithstanding any other provision of law, information disclosed by manufacturers or wholesalers under this paragraph or under an agreement with the Secretary of Veterans Affairs described in subsection (a)(6)(A) (other than the wholesale acquisition cost for purposes of carrying out section 1395w–3a of this title) is confidential and shall not be disclosed by the Secretary or the Secretary of Veterans Affairs or a State agency (or contractor therewith) in a form which discloses the identity of a specific manufacturer or wholesaler, prices charged for drugs by such manufacturer or wholesaler, except—

(i) as the Secretary determines to be necessary to carry out this section, to carry out section 1395w–3a of this title (including the determination and implementation of the payment amount and the rebate), or to carry out section 1395w–3b of this title, section 1320f–1(f) of this title, including rebates under paragraph (4) of such section, or section 1395w–114b of this title,

(ii) to permit the Comptroller General to review the information provided,

(iii) to permit the Director of the Congressional Budget Office to review the information provided,

(iv) to States to carry out this subchapter,

(v) to the Secretary to disclose (through a website accessible to the public) the weighted average of the most recently reported monthly average manufacturer prices and the average retail survey price determined for each multiple source drug in accordance with subsection (f),

(vi) in the case of categories of drug product or classification information that were not considered confidential by the Secretary on the day before April 18, 2019, and

(vii) to permit the Executive Director of the Medicare Payment Advisory Commission and the Executive Director of the Medicaid and CHIP Payment and Access Commission to review the information provided.

The previous sentence shall also apply to information disclosed under section 1395w–102(d)(2) or 1395w–104(c)(2)(G) of this title and drug pricing data reported under the first sentence of section 1395w–141(i)(1) of this title. Any information disclosed to the Executive Director of the Medicare Payment Advisory Commission or the Executive Director of the Medicaid and CHIP Payment and Access Commission pursuant to this subparagraph shall not be disclosed by either such Executive Director in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler. Such information also shall not be disclosed by either such Executive Director to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs by such manufacturer or wholesaler.

(B) The sponsor of the plan, or an administrator of the plan designated by the sponsor, shall maintain (and afford the Secretary access to) such records as the Secretary may require for purposes of audits and other oversight activities necessary to ensure the adequacy of prescription drug coverage and the accuracy of payments made under this section. The provisions of section 1395w–102(d)(3) of this title shall apply to such information under this section (including such actuarial value and attestation) in a manner similar to the manner in which they apply to financial records of PDP sponsors and MA organizations.

(I) effective on a date specified by the Secretary (but not earlier than January 1, 2011), the waiver by a PDP sponsor of a prescription drug plan under part D of subchapter XVIII or an MA organization offering an MA–PD plan under part C of such subchapter of any copayment for the first fill of a covered part D drug (as defined in section 1395w–102(e) of this title) that is a generic drug for individuals enrolled in the prescription drug plan or MA–PD plan, respectively; or

(2) Information which the Inspector General may obtain under paragraph (1) includes any supporting documentation necessary to validate claims for payment or payments under subchapter XVIII or XIX, including a prescribing physician’s medical records for an individual who is prescribed an item or service which is covered under part B of subchapter XVIII, a covered part D drug (as defined in section 1395w–102(e) of this title) for which payment is made under an MA–PD plan under part C of such subchapter, or a prescription drug plan under part D of such subchapter, and any records necessary for evaluation of the economy, efficiency, and effectiveness of the programs under subchapters XVIII and XIX.

(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 (as defined in section 1395w–102(e) of this title) during such year; and

(1) For purposes of this part, the term “qualifying single source drug” means, with respect to an initial price applicability year, subject to paragraphs (2) and (3), a covered part D drug (as defined in section 1395w–102(e) of this title) that is described in any of the following or a drug or biological product for which payment may be made under part B of subchapter XVIII that is described in any of the following:

(A) A drug—

(i) that is approved under section 355(c) of title 21 and is marketed pursuant to such approval;

(ii) for which, as of the selected drug 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 for any drug that is approved and marketed under section 355(j) of such title.

(B) A biological product—

(i) that is licensed under section 262(a) of this title and is marketed under section 262 of this title;

(ii) for which, as of the selected drug 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.

(i) in the case of a biological product that is a covered part D drug (as defined in section 1395w–102(e) of this title), 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 under section 1396r–8 of this title (or, if not reported by such manufacturer under section 1396r–8 of this title, as reported by such manufacturer to the Secretary pursuant to the agreement under section 1320f–2(a) of this title) 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), the maximum fair price negotiated under section 1320f–3 of this title for such biological product under such agreement; or

(BB) paragraph (2)(B)(iii), such maximum fair price, increased as described in section 1320f–4(b)(1)(A) of this title; and

(II) the number of units dispensed under part D of subchapter XVIII for such covered part D drug during each such calendar quarter of such price applicability period; and

(ii) in the case such biological product is a covered part D drug (as defined in section 1395w–102(e) of this title), the Medicare Prescription Drug Account under section 1395w–116 of this title in such Trust Fund.

(i) In the case of a covered part D drug (as defined in section 1395w–102(e) of this title), the sum of the plan specific enrollment weighted amounts for each prescription drug plan or MA–PD plan (as determined under paragraph (2)).

(A) Except as provided in subparagraph (B), the term “part D rebatable drug” means, with respect to an applicable period, a drug or biological described in subparagraph (C) that is a covered part D drug (as such term is defined under section 1395w–102(e) of this title).

(A) The term “covered discount card drug” has the meaning given the term “covered part D drug” in section 1395w–102(e) of this title.

(2) The term “covered part D drug” is defined in section 1395w–102(e) of this title.

(a) In order for coverage to be available under this part for covered part D drugs (as defined in section 1395w–102(e) of this title) of a manufacturer, the manufacturer must—

(1) participate in—

(A) for 2011 through 2024, the Medicare coverage gap discount program under section 1395w–114a of this title; and

(B) for 2025 and each subsequent year, the manufacturer discount program under section 1395w–114c of this title;

(2) have entered into and have in effect—

(A) for 2011 through 2024, an agreement described in subsection (b) of section 1395w–114a of this title with the Secretary; and

(B) for 2025 and each subsequent year, an agreement described in subsection (b) of section 1395w–114c of this title with the Secretary; and

(3) have entered into and have in effect, under terms and conditions specified by the Secretary, a contract with a third party that the Secretary has entered into a contract with under subsection (d)(3) of section 1395w–114a of this title.

(II) exclude expenditures attributable to covered outpatient prescription drugs that are not covered part D drugs (as defined in section 1395w–102(e) of this title, including drugs described in subparagraph (K) of section 1396r–8(d)(2) of this title); and

(A) provides medical assistance with respect to the provision of covered part D drugs (as defined in section 1395w–102(e) of this title) to low-income part D eligible individuals;

(I) Effective for items and services furnished on and after July 1, 2015, vacuum erection systems described as prosthetic devices described in section 1395x(s)(8) of this title shall be treated in the same manner as erectile dysfunction drugs are treated for purposes of section 1395w–102(e)(2)(A) of this title.