Change of when biosimilars are eligible for price negotiations

(a) In general Section 1192 of the Social Security Act (42 U.S.C. 1320f–1) is amended— (1) in subsection (c)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking such year and each subsequent year beginning before the first year that begins at least 9 months and inserting the year of the selected drug publication date for such initial price applicability year and each subsequent year, except that a drug or biological product shall no longer be a selected drug beginning on the first day of the year that begins; and (B) in paragraph (2)— (i) in subparagraph (B), by striking or during the negotiation period with respect to such initial price applicability year and inserting the first day of such initial price applicability year; and (ii) in the flush text following subparagraph (B)— (I) by striking and shall continue to and inserting if such negotiation period has not yet ended, shall not have its maximum fair price or the explanation of such maximum fair price published under section 1195(a) if such publication has not yet occurred, and shall; (II) by inserting solely before with respect to the number; and (III) by inserting, but no maximum fair price shall apply for such initial price applicability year in accordance with paragraph (1) before the period at the end; (2) in subsection (f)— (A) in paragraph (1)— (i) in subparagraph (A), by striking an extended monopoly drug (as defined in section 1194(c)(4); (ii) in subparagraph (B)— (I) in the heading, by striking Request required and inserting Procedures; (II) by redesignating clauses (i) and (ii) as clauses (ii) and (iii) respectively; (III) by inserting before clause (ii) (as so redesignated) the following: (i) Automatic delay (I) In general The Secretary shall apply, with respect to a biological product described in subparagraph (A), the rules described in subparagraph (A) of paragraph (2) (subject to subparagraphs (B) and (C) of such paragraph) if, prior to the selected drug publication date for the list published under subsection (a) with respect to the initial price applicability year for which the biological product may have been included as a selected drug on such list but for paragraph (2)(A)— (aa) the manufacturer of a biosimilar biological product for which such biological product will be the reference product has publicly disclosed in a press release or other communication, or the Secretary determines from information from any other source— (AA) that such manufacturer’s application for licensure under section 351(k) of the Public Health Service Act for the biosimilar biological product was accepted for review or approved by the Food and Drug Administration; or (BB) that such manufacturer’s clinical study or studies of the biosimilar biological product as described in section 351(k)(2)(A)(i)(I)(cc) of the Public Health Service Act were initiated and remain ongoing, are complete, or that no such study or studies are necessary; and (bb) subject to subclause (II), based on information submitted to the Secretary by any person or obtained by the Secretary from any other source, the Secretary determines that the manufacturer of the biosimilar biological product expects that such product will be marketed before the date that is 2 years after the selected drug publication date with respect to such initial price applicability year. (II) Requirements (aa) In general Before making the determination described in subclause (II)(bb), the Secretary shall— (AA) inform the manufacturer of the biosimilar biological product of the information on which the Secretary intends to rely in making such determination; and (BB) require that such manufacturer confirms in writing, under penalty of perjury, the accuracy of such information or corrects any such inaccurate information, including its expected marketing date. (bb) Clarification The existence of pending or prospective patent litigation over a biosimilar biological product shall not preclude application of the rules described in subparagraph (A) of paragraph (2) (subject to paragraphs (B) and (C) of such paragraph).; (IV) in clause (ii) (as so redesignated)— (aa) by striking subclause (II); (bb) by striking In general and all that follows through unless and inserting Delay upon request.— The Secretary shall provide for a delay under paragraph (2)(A) if; and (cc) by striking subparagraph (2)(A) or; and inserting paragraph (2)(A), provided that a determination of high likelihood is made under paragraph (3).; and (V) in clause (iii) (as so redesignated)— (aa) in the heading, by inserting for a delay upon request after documents; (bb) in subclause (I), in the matter before item (aa), by striking clause (i) and inserting clause (ii); (cc) in subclause (I)(bb), by inserting to the extent available, before all agreements; and (dd) in subclause (III)(bb)— (AA) by inserting the anticipated launch date before capital investment; and (BB) by striking year (or the 2 years, as applicable) and inserting applicable period; and (iii) in subparagraph (C)(i), by striking paragraph (2)(D)(iv) and inserting paragraph (2)(C)(iii); (B) in paragraph (2)— (i) in subparagraph (A)— (I) in the heading, by striking 1 year and inserting 2 years; (II) by inserting or paragraph (1)(B)(i) applies after under paragraph (3); and (III) by striking 1 year and inserting 2 years; (ii) by striking subparagraph (B) and inserting the following: (B) If not licensed and marketed during the delay If, during the time period between the selected drug publication date on which the biological product would have been included on the list as a selected drug pursuant to subsection (a) but for subparagraph (A), and the selected drug 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 on such list, the Secretary determines that such biological product is not the reference product for a biosimilar biological product that has been licensed and marketed under section 351(k) of the Public Health Service Act— (i) the Secretary shall include the biological product as a selected drug on the list published under subsection (a) 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 on such list but for subparagraph (A); and (ii) if such biosimilar biological product has not been licensed and marketed under section 351(k) of the Public Health Service Act on or before the date that is 2 years after the selected drug publication date on which the biological product would have been included on the list as a selected drug pursuant to subsection (a) but for subparagraph (A), the manufacturer of such biological product shall pay a rebate under paragraph (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 subparagraph (A).; (iii) by striking subparagraph (C); (iv) by redesignating subparagraph (D) as subparagraph (C); and (v) in subparagraph (C) (as so redesignated)— (I) by striking clauses (ii) and (iii); (II) by redesignating clause (iv) as clause (ii); and (III) in clause (ii)(II) (as so redesignated), by striking paragraph (1)(B)(ii)(I)(bb) and inserting paragraph (1)(B)(iii)(I)(bb); (C) by striking paragraph (3) and inserting the following: (3) High likelihood (A) In general Subject to subparagraph (B), for purposes of this subsection, there is a high likelihood described in paragraph (1) or paragraph (2), as applicable, if the Secretary determines that information submitted to the Secretary by any person or obtained by the Secretary from any other source provides clear and convincing evidence that such biosimilar biological product will, within the time period specified under paragraph (1)(A) be marketed. (B) Determination requirements Before determining whether there is a high likelihood described in paragraph (1) or paragraph (2), the Secretary shall inform the manufacturer of the biosimilar biological product of the information on which the Secretary intends to rely in making such determination and shall require that such manufacturer confirms in writing, under penalty of perjury, the accuracy of such information or correct any such inaccurate information. (C) Clarification The existence of pending or prospective patent litigation regarding the biosimilar biological product shall not preclude a finding of high likelihood under this paragraph.; and (D) in paragraph (4)— (i) in subparagraph (A), by striking subparagraphs (B)(ii)(II) and (C)(ii) of paragraph (2) and inserting paragraph (2)(B)(ii); and (ii) in subparagraph (B)— (I) in clause (i), by striking subclause (I) and inserting the following: (I) 75 percent of the amount by which the average manufacturer price, as reported by the manufacturer of such covered part D drug under section 1927 (or, if not reported by such manufacturer under section 1927, as reported by such manufacturer to the Secretary pursuant to the agreement under section 1193(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— (aa) for the initial price applicability year that would have applied but for a delay under paragraph (2)(A), the maximum fair price negotiated under section 1194 for such biological product under such agreement; or (bb) for the second year of such delay, such maximum fair price, increased as described in section 1195(b)(1)(A); and; and (II) in clause (ii), by striking subclause (I) and inserting the following: (I) 80 percent of the amount by which the payment amount for such biological product under section 1847A(b), with respect to each of the calendar quarters of the price applicability period that would have applied but for this subsection; exceeds— (aa) for the initial price applicability year that would have applied but for a delay under paragraph (2)(A), the maximum fair price negotiated under section 1194 for such biological product under such agreement; or (bb) for the second year of such delay, such maximum fair price, increased as described in section 1195(b)(1)(A); and; and (3) by adding at the end the following new subsection: (g) Definition of marketed In this section, the term marketed means, with respect to a drug or biological product (including a biosimilar biological product) introduced or delivered for introduction into interstate commerce.. (b) Conforming and technical amendments Such Act is amended— (1) in section 1192(b)(3) (42 U.S.C. 1320f–1(b)(3))— (A) by striking subparagraphs (B)(ii)(I) and (C)(i) of subsection (f)(2) and inserting subsection (f)(2)(B)(i); and (B) by striking described in such subparagraphs and inserting described in such subsection; and (2) in section 1198(2) (42 U.S.C. 1320f–7(2)), by striking 1192(f), and inserting 1192(f). (c) Effective date The amendments made by this section shall apply with respect to initial price applicability years beginning with initial price applicability year 2026.