S 1186
Lower Drug Costs for Families Act
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Sign in to take action- Introduced
- Passed Senate
- Passed House
- To President
- Became Law
Bill overview
The Lower Drug Costs for Families Act aims to lower prescription drug costs for Medicare and Medicaid beneficiaries. It extends requirements for drug manufacturers to issue inflation rebates to the government to apply to drugs sold in the private insurance market. The bill also changes the base year used to calculate these rebates, shifting it from 2021 to 2016, and adjusts the calculation methodology to better reflect actual drug prices.
Key provisions
- Applies prescription drug inflation rebates to drugs available in the commercial market under private health insurance.
- Changes the base year for rebate calculations from 2021 to 2016.
- Modifies the calculation of billing units for inflation rebates.
- Adjusts the methodology for determining the total number of billing units used in rebate calculations.
- Updates the timing of rebate reporting and payment requirements.
- Modifies the calculation of the average manufacturer price (AMP) for part D drugs.
- Excludes certain units from AMP calculations, including those paid under state Medicaid programs and under the 340B discount program (starting in 2026).
Who is affected
- Medicare beneficiaries
- Medicaid beneficiaries
- Prescription drug manufacturers
- Private health insurance companies
- Pharmaceutical industry
Notable changes
- Extends rebate requirements from Medicare to the commercial market.
Sponsors
Official sponsors from legislative records.
Primary sponsor
Cosponsors
Angus S., Jr. King
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119th CONGRESS — 1st Session
S. 1186
IN THE SENATE OF THE UNITED STATES
A BILL
To amend title XVIII of the Social Security Act to apply prescription drug inflation rebates to drugs furnished in the commercial market and to change the base year for rebate calculations.
This Act may be cited as the Lower Drug Costs for Families Act
.
Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended—
unitsand inserting
billing units;
in paragraph (2)(A), by striking for which payment is made under this part
and inserting that would be payable under this part if such drug were furnished to an individual enrolled under this part
; and
in paragraph (3)—
unitsand inserting
billing units; and
by striking subparagraph (B) and inserting the following:
For purposes of subparagraph (A)(i), the total number of billing units with respect to a part B rebatable drug is determined as follows:
Determine the total number of units equal to—
Section 1847A(i) of the Social Security Act (42 U.S.C. 1395w–3a(i)) is amended—
in paragraph (3)—
July 1, 2021and inserting
July 1, 2016; and
in subparagraph (E), by striking January 2021
and inserting January 2016
; and
in paragraph (4)—
by striking December 1, 2020
and inserting December 31, 2015
; and
January 2021and inserting
January 2016;
December 1, 2020and inserting
December 31, 2015; and
January 2021and inserting
January 2016.
The amendments made by this subsection shall apply with respect to calendar quarters beginning on or after January 1, 2026.
Section 1860D–14B of the Social Security Act (42 U.S.C. 1395w–114b) is amended—
in subsection (b)—
in subparagraph (A)(i), by striking the total number of units
and all that follows through the semicolon and inserting the following: the total number of units that are used to calculate the average manufacturer price of such dosage form and strength with respect to such part D rebatable drug, as reported by the manufacturer of such drug under section 1927 for each month, with respect to such period;
; and
by striking subparagraph (B) and inserting the following:
Units of each dosage form and strength of such part D rebatable drug for which payment was made under a State plan under title XIX (or waiver of such plan), as reported by States under section 1927(b)(2)(A).
in paragraph (6), by striking information.—The Secretary
and all that follows through rebatable covered part D drug dispensed
and inserting the following: AMP reports.—The Secretary shall provide for a method and process under which, in the case of a manufacturer of a part D rebatable drug that submits revisions to information submitted under section 1927 by the manufacturer with respect to such drug
; and
by striking subsection (d) and inserting the following:
Section 1860D–14B of the Social Security Act (42 U.S.C. 1395w–114b) is amended—
in subsection (b)(5)—
October 1, 2021and inserting
October 1, 2016; and
by striking January 2021
and inserting January 2016
; and
in subparagraph (C), by striking January 2021
and inserting January 2016
; and
January 1, 2021and inserting
January 1, 2016; and
by striking October 1, 2021
and inserting October 1, 2016
; and
January 2021and inserting
January 2016.
The amendments made by this subsection shall take apply with respect to applicable periods (as defined in section 1860D–14B(g)(7) of the Social Security Act (42 U.S.C. 1395w–114b(g)(7))) beginning on or after October 1, 2025.