---
kind: "section"
citation: "42 U.S.C. § 1395w–3b"
title: "42"
title_heading: "The Public Health and Welfare"
number: "1395w–3b"
heading: "Competitive acquisition of outpatient drugs and biologicals"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/1395w-3b"
units:
  - "Chapter 7 — Social Security"
  - "Subchapter XVIII — Health Insurance for Aged and Disabled"
  - "Part B — Supplementary Medical Insurance Benefits for Aged and Disabled"
---

# §1395w–3b. Competitive acquisition of outpatient drugs and biologicals

- (a) **Implementation of competitive acquisition—**
  - (1) **Implementation of program—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish and implement a competitive acquisition program under which—
      - (i) competitive acquisition areas are established for contract award purposes for acquisition of and payment for categories of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals (as defined in [paragraph (2)](#a-2)) under this part;
      - (ii) each [physician](/usc/42/1301.md?p=a-7) is given the opportunity annually to elect to obtain [drugs](/usc/42/11851.md?p=4) and biologicals under the program, rather than under [section 1395w–3a of this title](/usc/42/1395w–3a.md); and
      - (iii) each [physician](/usc/42/1301.md?p=a-7) who elects to obtain [drugs](/usc/42/11851.md?p=4) and biologicals under the program makes an annual selection under [paragraph (5)](#a-5) of the contractor through which [drugs](/usc/42/11851.md?p=4) and biologicals within a category of [drugs](/usc/42/11851.md?p=4) and biologicals will be acquired and delivered to the [physician](/usc/42/1301.md?p=a-7) under this part.

      This section shall not apply in the case of a [physician](/usc/42/1301.md?p=a-7) who elects [section 1395w–3a of this title](/usc/42/1395w–3a.md) to apply.

    - (B) **Implementation—** For purposes of implementing the program, the [Secretary](/usc/42/1301.md?p=a-6) shall establish categories of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals. The [Secretary](/usc/42/1301.md?p=a-6) shall phase in the program with respect to those categories beginning in 2006 in such manner as the [Secretary](/usc/42/1301.md?p=a-6) determines to be appropriate.
    - (C) **Waiver of certain provisions—** In order to promote competition, in carrying out the program the [Secretary](/usc/42/1301.md?p=a-6) may waive such provisions of the Federal Acquisition Regulation as are necessary for the efficient implementation of this section, other than provisions relating to confidentiality of information and such other provisions as the [Secretary](/usc/42/1301.md?p=a-6) determines appropriate.
    - (D) **Exclusion authority—** The [Secretary](/usc/42/1301.md?p=a-6) may exclude competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals ([including](/usc/42/1301.md?p=b) a class of such [drugs](/usc/42/11851.md?p=4) and biologicals) from the competitive bidding system under this section if the application of competitive bidding to such [drugs](/usc/42/11851.md?p=4) or biologicals—
      - (i) is not likely to result in significant savings; or
      - (ii) is likely to have an adverse impact on access to such [drugs](/usc/42/11851.md?p=4) or biologicals.
  - (2) **Competitively biddable drugs and biologicals and program defined—** For purposes of this section—
    - (A) **Competitively biddable drugs and biologicals defined—** The term “competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals” means a [drug](/usc/42/11851.md?p=4) or biological described in [section 1395u(o)(1)(C)](/usc/42/1395u.md?p=o-1-C) of this title and furnished on or after January 1, 2006.
    - (B) **Program—** The term “program” means the competitive acquisition program under this section.
    - (C) **Competitive acquisition area; area—** The terms “competitive acquisition area” and “area” mean an appropriate geographic region established by the [Secretary](/usc/42/1301.md?p=a-6) under the program.
    - (D) **Contractor—** The term “contractor” means an entity that has entered into a contract with the [Secretary](/usc/42/1301.md?p=a-6) under this section.
  - (3) **Application of program payment methodology—**
    - (A) **In general—** With respect to competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals which are supplied under the program in an area and which are prescribed by a [physician](/usc/42/1301.md?p=a-7) who has elected this section to apply—
      - (i) the claim for such [drugs](/usc/42/11851.md?p=4) and biologicals shall be submitted by the contractor that supplied the [drugs](/usc/42/11851.md?p=4) and biologicals;
      - (ii) collection of amounts of any deductible and coinsurance applicable with respect to such [drugs](/usc/42/11851.md?p=4) and biologicals shall be the responsibility of such contractor and shall not be collected unless the [drug](/usc/42/11851.md?p=4) or biological is administered to the individual involved; and
      - (iii) the payment under this section (and related amounts of any applicable deductible and coinsurance) for such [drugs](/usc/42/11851.md?p=4) and biologicals shall be made only to such contractor upon receipt of a claim for a [drug](/usc/42/11851.md?p=4) or biological supplied by the contractor for [administration](/usc/42/1301.md?p=a-10) to a beneficiary.
    - (B) **Process for adjustments—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide a process for adjustments to payments in the case in which payment is made for [drugs](/usc/42/11851.md?p=4) and biologicals which were billed at the time of dispensing but which were not actually administered.
    - (C) **Information for purposes of cost-sharing—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide a process by which [physicians](/usc/42/1301.md?p=a-7) submit information to contractors for purposes of the collection of any applicable deductible or coinsurance amounts under [subparagraph (A)(ii)](#a-3-A-ii).
    - (D) **Post-payment review process—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish (by program instruction or otherwise) a post-payment review process (which may include the use of statistical sampling) to assure that payment is made for a [drug](/usc/42/11851.md?p=4) or biological under this section only if the [drug](/usc/42/11851.md?p=4) or biological has been administered to a beneficiary. The [Secretary](/usc/42/1301.md?p=a-6) shall recoup, offset, or collect any overpayments determined by the [Secretary](/usc/42/1301.md?p=a-6) under such process.
  - (4) **Contract required—** Payment may not be made under this part for competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals prescribed by a [physician](/usc/42/1301.md?p=a-7) who has elected this section to apply within a category and a competitive acquisition area with respect to which the program applies unless—
    - (A) the [drugs](/usc/42/11851.md?p=4) or biologicals are supplied by a contractor with a contract under this section for such category of [drugs](/usc/42/11851.md?p=4) and biologicals and area; and
    - (B) the [physician](/usc/42/1301.md?p=a-7) has elected such contractor under [paragraph (5)](#a-5) for such category and area.
  - (5) **Contractor selection process—**
    - (A) **Annual selection—**
      - (i) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) shall provide a process for the selection of a contractor, on an annual basis and in such exigent circumstances as the [Secretary](/usc/42/1301.md?p=a-6) may provide and with respect to each category of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals for an area by selecting [physicians](/usc/42/1301.md?p=a-7).
      - (ii) **Timing of selection—** The selection of a contractor under [clause (i)](#a-5-A-i) shall be made at the time of the election described in [section 1395w–3a(a) of this title](/usc/42/1395w–3a.md?p=a) for this section to apply and shall be coordinated with agreements entered into under [section 1395u(h) of this title](/usc/42/1395u.md?p=h).
    - (B) **Information on contractors—** The [Secretary](/usc/42/1301.md?p=a-6) shall make available to [physicians](/usc/42/1301.md?p=a-7) on an ongoing basis, through a directory posted on the Internet website of the Centers for Medicare & Medicaid Services or otherwise and upon request, a list of the contractors under this section in the different competitive acquisition areas.
    - (C) **Selecting physician defined—** For purposes of this section, the term “selecting [physician](/usc/42/1301.md?p=a-7)” means, with respect to a contractor and category and competitive acquisition area, a [physician](/usc/42/1301.md?p=a-7) who has elected this section to apply and has selected to apply under this section such contractor for such category and area.
- (b) **Program requirements—**
  - (1) **Contract for competitively biddable drugs and biologicals—** The [Secretary](/usc/42/1301.md?p=a-6) shall conduct a competition among entities for the acquisition of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals. Notwithstanding any other provision of this subchapter, in the case of a multiple source [drug](/usc/42/11851.md?p=4), the [Secretary](/usc/42/1301.md?p=a-6) shall conduct such competition among entities for the acquisition of at least one competitively biddable [drug](/usc/42/11851.md?p=4) and biological within each billing and payment code within each category for each competitive acquisition area.
  - (2) **Conditions for awarding contract—**
    - (A) **In general—** The [Secretary](/usc/42/1301.md?p=a-6) may not award a contract to any entity under the competition conducted in a competitive acquisition area pursuant to [paragraph (1)](#b-1) with respect to the acquisition of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals within a category unless the [Secretary](/usc/42/1301.md?p=a-6) finds that the entity meets all of the following with respect to the contract period involved:
      - (i) **Capacity to supply competitively biddable drug or biological within category—**
        - (I) **In general—** The entity has sufficient arrangements to acquire and to deliver competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals within such category in the area specified in the contract.
        - (II) **Shipment methodology—** The entity has arrangements in effect for the shipment at least 5 days each week of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals under the contract and for the timely delivery ([including](/usc/42/1301.md?p=b) for emergency situations) of such [drugs](/usc/42/11851.md?p=4) and biologicals in the area under the contract.
      - (ii) **Quality, service, financial performance and solvency standards—** The entity meets quality, service, financial performance, and solvency [standards](/usc/42/1320d.md?p=7) specified by the [Secretary](/usc/42/1301.md?p=a-6), [including](/usc/42/1301.md?p=b)—
        - (I) the establishment of procedures for the prompt response and resolution of complaints of [physicians](/usc/42/1301.md?p=a-7) and individuals and of inquiries regarding the shipment of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals; and
        - (II) a grievance and appeals process for the resolution of disputes.
    - (B) **Additional considerations—** The [Secretary](/usc/42/1301.md?p=a-6) may refuse to award a contract under this section, and may terminate such a contract, with an entity based upon—
      - (i) the suspension or revocation, by the Federal Government or a [State](/usc/42/619.md?p=5) government, of the entity’s license for the distribution of [drugs](/usc/42/11851.md?p=4) or biologicals ([including](/usc/42/1301.md?p=b) [controlled substances](/usc/42/11851.md?p=2)); or
      - (ii) the exclusion of the entity under [section 1320a–7 of this title](/usc/42/1320a–7.md) from participation under this subchapter.
    - (C) **Application of Medicare Provider Ombudsman—** For provision providing for a program-wide Medicare Provider Ombudsman to review complaints, see [section 1395ee(b) of this title](/usc/42/1395ee.md?p=b), as added by section 923 of the Medicare Prescription [Drug](/usc/42/11851.md?p=4), Improvement, and Modernization Act of 2003.[^1]
  - (3) **Awarding multiple contracts for a category and area—** The [Secretary](/usc/42/1301.md?p=a-6) may limit (but not below 2) the number of qualified entities that are awarded such contracts for any category and area. The [Secretary](/usc/42/1301.md?p=a-6) shall select among qualified entities based on the following:
    - (A) The bid prices for competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals within the category and area.
    - (B) Bid price for distribution of such [drugs](/usc/42/11851.md?p=4) and biologicals.
    - (C) Ability to ensure product integrity.
    - (D) [Customer](/usc/42/7275.md?p=5) service.
    - (E) Past experience in the distribution of [drugs](/usc/42/11851.md?p=4) and biologicals, [including](/usc/42/1301.md?p=b) [controlled substances](/usc/42/11851.md?p=2).
    - (F) Such other factors as the [Secretary](/usc/42/1301.md?p=a-6) may specify.
  - (4) **Terms of contracts—**
    - (A) **In general—** A contract entered into with an entity under the competition conducted pursuant to [paragraph (1)](#b-1) is subject to terms and conditions that the [Secretary](/usc/42/1301.md?p=a-6) may specify consistent with this section.
    - (B) **Period of contracts—** A contract under this section shall be for a term of 3 years, but may be terminated by the [Secretary](/usc/42/1301.md?p=a-6) or the entity with appropriate, advance notice.
    - (C) **Integrity of drug and biological distribution system—** A contractor (as defined in [subsection (a)(2)(D)](#a-2-D)) shall—
      - (i) acquire all [drug](/usc/42/11851.md?p=4) and biological products it distributes directly from the manufacturer or from a distributor that has acquired the products directly from the manufacturer; and
      - (ii) comply with any product integrity safeguards as may be determined to be appropriate by the [Secretary](/usc/42/1301.md?p=a-6).

      Nothing in this subparagraph shall be construed to relieve or exempt any contractor from the provisions of the Federal Food, [Drug](/usc/42/11851.md?p=4), and Cosmetic Act [[21 U.S.C. 301](/usc/21/301.md) et seq.] that relate to the wholesale distribution of prescription [drugs](/usc/42/11851.md?p=4) or biologicals.

    - (D) **Compliance with code of conduct and fraud and abuse rules—** Under the contract—
      - (i) the contractor shall comply with a code of conduct, specified or recognized by the [Secretary](/usc/42/1301.md?p=a-6), that [includes](/usc/42/1301.md?p=b) [standards](/usc/42/1320d.md?p=7) relating to conflicts of interest; and
      - (ii) the contractor shall comply with all applicable provisions relating to prevention of fraud and [abuse](/usc/42/1397j.md?p=1), [including](/usc/42/1301.md?p=b) compliance with applicable guidelines of the Department of Justice and the Inspector General of the Department of Health and Human Services.
    - (E) **Direct delivery of drugs and biologicals to physicians—** Under the contract the contractor shall only supply competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals directly to the selecting [physicians](/usc/42/1301.md?p=a-7) and not directly to individuals, except under circumstances and settings where an individual currently receives a [drug](/usc/42/11851.md?p=4) or biological in the individual’s home or other non-[physician](/usc/42/1301.md?p=a-7) office setting as the [Secretary](/usc/42/1301.md?p=a-6) may provide. The contractor shall not deliver [drugs](/usc/42/11851.md?p=4) and biologicals to a selecting [physician](/usc/42/1301.md?p=a-7) except upon receipt of a prescription for such [drugs](/usc/42/11851.md?p=4) and biologicals, and such necessary data as may be required by the [Secretary](/usc/42/1301.md?p=a-6) to carry out this section. This section does not—
      - (i) require a [physician](/usc/42/1301.md?p=a-7) to submit a prescription for each individual [treatment](/usc/42/11851.md?p=11); or
      - (ii) change a [physician](/usc/42/1301.md?p=a-7)’s flexibility in terms of writing a prescription for [drugs](/usc/42/11851.md?p=4) or biologicals for a single [treatment](/usc/42/11851.md?p=11) or a course of [treatment](/usc/42/11851.md?p=11).
  - (5) **Permitting access to drugs and biologicals—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish rules under this section under which [drugs](/usc/42/11851.md?p=4) and biologicals which are acquired through a contractor under this section may be used to resupply inventories of such [drugs](/usc/42/11851.md?p=4) and biologicals which are administered consistent with safe [drug](/usc/42/11851.md?p=4) [practices](/usc/42/17061.md?p=19) and with adequate safeguards against fraud and [abuse](/usc/42/1397j.md?p=1). The previous sentence shall apply if the [physicians](/usc/42/1301.md?p=a-7) can demonstrate to the [Secretary](/usc/42/1301.md?p=a-6) all of the following:
    - (A) The [drugs](/usc/42/11851.md?p=4) or biologicals are required immediately.
    - (B) The [physician](/usc/42/1301.md?p=a-7) could not have reasonably anticipated the immediate requirement for the [drugs](/usc/42/11851.md?p=4) or biologicals.
    - (C) The contractor could not deliver to the [physician](/usc/42/1301.md?p=a-7) the [drugs](/usc/42/11851.md?p=4) or biologicals in a timely manner.
    - (D) The [drugs](/usc/42/11851.md?p=4) or biologicals were administered in an emergency situation.
  - (6) **Construction—** Nothing in this section shall be construed as waiving applicable [State](/usc/42/619.md?p=5) requirements relating to licensing of pharmacies.
- (c) **Bidding process—**
  - (1) **In general—** In awarding a contract for a category of [drugs](/usc/42/11851.md?p=4) and biologicals in an area under the program, the [Secretary](/usc/42/1301.md?p=a-6) shall consider with respect to each entity seeking to be awarded a contract the bid price and the other factors referred to in [subsection (b)(3)](#b-3).
  - (2) **Bid defined—** In this section, the term “bid” means an offer to furnish a competitively biddable [drug](/usc/42/11851.md?p=4) or biological for a particular price and time period.
  - (3) **Bidding on a national or regional basis—** Nothing in this section shall be construed as precluding a bidder from bidding for contracts in all areas of the [United States](/usc/42/1301.md?p=a-2) or as requiring a bidder to submit a bid for all areas of the [United States](/usc/42/1301.md?p=a-2).
  - (4) **Uniformity of bids within area—** The amount of the bid submitted under a contract offer for any competitively biddable [drug](/usc/42/11851.md?p=4) or biological for an area shall be the same for that [drug](/usc/42/11851.md?p=4) or biological for all portions of that area.
  - (5) **Confidentiality of bids—** The provisions of subparagraph (D) of [section 1396r–8(b)(3) of this title](/usc/42/1396r–8.md?p=b-3) shall apply to periods during which a bid is submitted with respect to a competitively biddable [drug](/usc/42/11851.md?p=4) or biological under this section in the same manner as it applies to information disclosed under such section, except that any reference—
    - (A) in that subparagraph to a “manufacturer or wholesaler” is deemed a reference to a “bidder” under this section;
    - (B) in that section to “prices charged for [drugs](/usc/42/11851.md?p=4)” is deemed a reference to a “bid” submitted under this section; and
    - (C) in clause (i) of that section to “this section”, is deemed a reference to “part B of subchapter XVIII”.
  - (6) **Inclusion of costs—** The bid price submitted in a contract offer for a competitively biddable [drug](/usc/42/11851.md?p=4) or biological shall—
    - (A) include all costs related to the delivery of the [drug](/usc/42/11851.md?p=4) or biological to the selecting [physician](/usc/42/1301.md?p=a-7) (or other point of delivery); and
    - (B) include the costs of dispensing ([including](/usc/42/1301.md?p=b) shipping) of such [drug](/usc/42/11851.md?p=4) or biological and management fees, but shall not include any costs related to the [administration](/usc/42/1301.md?p=a-10) of the [drug](/usc/42/11851.md?p=4) or biological, or wastage, spillage, or spoilage.
  - (7) **Price adjustments during contract period; disclosure of costs—** Each contract awarded shall provide for—
    - (A) disclosure to the [Secretary](/usc/42/1301.md?p=a-6) the contractor’s reasonable, net acquisition costs for periods specified by the [Secretary](/usc/42/1301.md?p=a-6), not more often than quarterly, of the contract; and
    - (B) appropriate price adjustments over the period of the contract to reflect significant increases or decreases in a contractor’s reasonable, net acquisition costs, as so disclosed.
- (d) **Computation of payment amounts—**
  - (1) **In general—** Payment under this section for competitively biddable [drugs](/usc/42/11851.md?p=4) or biologicals shall be based on bids submitted and accepted under this section for such [drugs](/usc/42/11851.md?p=4) or biologicals in an area. Based on such bids the [Secretary](/usc/42/1301.md?p=a-6) shall determine a single payment amount for each competitively biddable [drug](/usc/42/11851.md?p=4) or biological in the area.
  - (2) **Special rules—** The [Secretary](/usc/42/1301.md?p=a-6) shall establish rules regarding the use under this section of the alternative payment amount provided under [section 1395w–3a of this title](/usc/42/1395w–3a.md) to the use of a price for specific competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals in the following cases:
    - (A) **New drugs and biologicals—** A competitively biddable [drug](/usc/42/11851.md?p=4) or biological for which a payment and billing code has not been established.
    - (B) **Other cases—** Such other exceptional cases as the [Secretary](/usc/42/1301.md?p=a-6) may specify in regulations.
- (e) **Cost-sharing—**
  - (1) **Application of coinsurance—** Payment under this section for competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals shall be in an amount equal to 80 percent of the payment basis described in [subsection (d)(1)](#d-1).
  - (2) **Deductible—** Before applying [paragraph (1)](#e-1), the individual shall be required to meet the deductible described in [section 1395l(b)](/usc/42/1395l.md?p=b) of this title.
  - (3) **Collection—** Such coinsurance and deductible shall be collected by the contractor that supplies the [drug](/usc/42/11851.md?p=4) or biological involved. Subject to [subsection (a)(3)(B)](#a-3-B), such coinsurance and deductible may be collected in a manner similar to the manner in which the coinsurance and deductible are collected for durable medical equipment under this part.
- (f) **Special payment rules—**
  - (1) **Use in exclusion cases—** If the [Secretary](/usc/42/1301.md?p=a-6) excludes a [drug](/usc/42/11851.md?p=4) or biological (or class of [drugs](/usc/42/11851.md?p=4) or biologicals) under [subsection (a)(1)(D)](#a-1-D), the [Secretary](/usc/42/1301.md?p=a-6) may provide for payment to be made under this part for such [drugs](/usc/42/11851.md?p=4) and biologicals (or class) using the payment methodology under [section 1395w–3a of this title](/usc/42/1395w–3a.md).
  - (2) **Application of requirement for assignment—** For provision requiring assignment of claims for competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals, see [section 1395u(o)(3)](/usc/42/1395u.md?p=o-3) of this title.
  - (3) **Protection for beneficiary in case of medical necessity denial—** For protection of individuals against liability in the case of medical necessity determinations, see [section 1395u(b)(3)(B)(ii)(III) of this title](/usc/42/1395u.md).
- (g) **Judicial review—** There shall be no administrative or judicial review under [section 1395ff of this title](/usc/42/1395ff.md), [section 1395oo](/usc/42/1395oo.md) of this title, or otherwise, of—
  - (1) the establishment of payment amounts under [subsection (d)(1)](#d-1);
  - (2) the awarding of contracts under this section;
  - (3) the establishment of competitive acquisition areas under [subsection (a)(2)(C)](#a-2-C);
  - (4) the phased-in implementation under [subsection (a)(1)(B)](#a-1-B);
  - (5) the selection of categories of competitively biddable [drugs](/usc/42/11851.md?p=4) and biologicals for competitive acquisition under such subsection or the selection of a [drug](/usc/42/11851.md?p=4) in the case of multiple source [drugs](/usc/42/11851.md?p=4); or
  - (6) the bidding structure and number of contractors selected under this section.

## Footnotes

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

## Source credit

(Aug. 14, 1935, ch. 531, title XVIII, § 1847B, as added Pub. L. 108–173, title III, § 303(d)(1), Dec. 8, 2003, 117 Stat. 2245; amended Pub. L. 109–432, div. B, title I, § 108(a), Dec. 20, 2006, 120 Stat. 2983.)

## Notes

### Editorial Notes

### References in Text

Section 1395ee(b) of this title, referred to in subsec. (b)(2)(C), was added by section 942(a)(5) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108–173, not section 923 of that Act, and relates to the Council for Technology and Innovation, not to the Medicare Provider Ombudsman.

The Federal Food, Drug, and Cosmetic Act, referred to in subsec. subsec. (b)(4)(C), is act June 25, 1938, ch. 675, 52 Stat. 1040, which is classified generally to chapter 9 (§ 301 et seq.) of Title 21, Food and Drugs. For complete classification of this Act to the Code, see section 301 of Title 21 and Tables.

### Amendments

2006—Subsec. (a)(3)(A)(iii). Pub. L. 109–432, § 108(a)(1), substituted “and biologicals shall be made only to such contractor upon receipt of a claim for a drug or biological supplied by the contractor for administration to a beneficiary.” for “and biologicals—

“(I) shall be made only to such contractor; and

“(II) shall be conditioned upon the administration of such drugs and biologicals.”

Subsec. (a)(3)(D). Pub. L. 109–432, § 108(a)(2), added subpar. (D).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2006 Amendment

Pub. L. 109–432, div. B, title I, § 108(c), Dec. 20, 2006, 120 Stat. 2983, provided that: “The amendments made by subsection (a) [amending this section] shall apply to payment for drugs and biologicals supplied under section 1847B of the Social Security Act (42 U.S.C. 1395w–3b)— on or after April 1, 2007; and on or after July 1, 2006, and before April 1, 2007, for claims that are unpaid as of April 1, 2007.”

### Construction of 2006 Amendment

Pub. L. 109–432, div. B, title I, § 108(b), Dec. 20, 2006, 120 Stat. 2983, provided that: “Nothing in this section [amending this section and enacting provisions set out as a note above] shall be construed as— requiring the conduct of any additional competition under subsection (b)(1) of section 1847B of the Social Security Act (42 U.S.C. 1395w–3b); or requiring any additional process for elections by physicians under subsection (a)(1)(A)(ii) of such section or additional selection by a selecting physician of a contractor under subsection (a)(5) of such section.”

### Report

Pub. L. 108–173, title III, § 303(d)(2), Dec. 8, 2003, 117 Stat. 2252, provided that: “Not later than July 1, 2008, the Secretary [of Health and Human Services] shall submit to Congress a report on the program conducted under section 1847B of the Social Security Act [42 U.S.C. 1395w–3b], as added by paragraph (1). Such report shall include information on savings, reductions in cost-sharing, access to competitively biddable drugs and biologicals, the range of choices of contractors available to physicians, the satisfaction of physicians and of individuals enrolled under this part [probably means part B of title XVIII of the Social Security Act, 42 U.S.C. 1395j et seq.], and information comparing prices for drugs and biologicals under such section and section 1847A of such Act [42 U.S.C. 1395w–3a], as added by subsection (c).”

### Application of 2003 Amendment to Physician Specialties

Amendment by section 303 of Pub. L. 108–173, insofar as applicable to payments for drugs or biologicals and drug administration services furnished by physicians, is applicable only to physicians in the specialties of hematology, hematology/oncology, and medical oncology under this subchapter, see section 303(j) of Pub. L. 108–173, set out as a note under section 1395u of this title.

Notwithstanding section 303(j) of Pub. L. 108–173 (see note above), amendment by section 303 of Pub. L. 108–173 also applicable to payments for drugs or biologicals and drug administration services furnished by physicians in specialties other than the specialties of hematology, hematology/oncology, and medical oncology, see section 304 of Pub. L. 108–173, set out as a note under section 1395u of this title.