S.Amdt. 2869

SA 2869. Mr. NELSON of Florida (for himself, Mr. Rockefeller, Mr.
Begich, Mr. Leahy, Mr. Brown, Ms. Stabenow, and Mrs. Shaheen) submitted
an amendment intended to be proposed to amendment SA 2786 proposed by
Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the
bill H.R. 3590, to amend the Internal Revenue Code of 1986 to modify
the first-time homebuyers credit in the case of members of the Armed
Forces and certain other Federal employees, and for other purposes;
which was ordered to lie on the table; as follows:

On page 974, between lines 9 and 10, insert the following:
(b) Elimination of Coverage Gap.--Section 1860D-2(b) of the
Social Security Act (42 U.S.C. 1395w-102(b)) is further
amended--
(1) in paragraph (3)(A), by striking ``and (7)'' and
inserting ``, (7), and (8)'';
(2) in paragraph (4)(B)(i), by inserting ``subject to
paragraph (8)'' after ``purposes of this part''; and
(3) by adding at the end the following new paragraph:
``(8) Phased-in elimination of coverage gap.--
``(A) In general.--For each year beginning with 2011, the
Secretary shall consistent with this paragraph progressively
increase the initial coverage limit (described in subsection
(b)(3)) and decrease the annual out-of-pocket threshold from
the amounts otherwise computed until there is a continuation
of coverage from the initial coverage limit for expenditures
incurred through the total amount of expenditures at which
benefits are available under paragraph (4).
``(B) Increase in initial coverage limit.--For a year
beginning with 2011, the initial coverage limit otherwise
computed without regard to this paragraph shall be increased
by \1/2\ of the cumulative phase-in percentage (as defined in
subparagraph (D)(ii) for the year) times the out-of-pocket
gap amount (as defined in subparagraph (E)) for the year.
``(C) Decrease in annual out-of-pocket threshold.--For a
year beginning with 2011, the annual out-of-pocket threshold
otherwise computed without regard to this paragraph shall be
decreased by \1/2\ of the cumulative phase-in percentage of
the out-of-pocket gap amount for the year multiplied by 1.75.
``(D) Phase-in.--For purposes of this paragraph:
``(i) Annual phase-in percentage.--The term `annual phase-
in percentage' means--

``(I) for 2011, 13 percent;
``(II) for 2012, 2013, 2014, and 2015, 5 percent;
``(III) for 2016 through 2018, 7.5 percent; and
``(IV) for 2019 and each subsequent year, 10 percent.

``(ii) Cumulative phase-in percentage.--The term
`cumulative phase-in percentage' means for a year the sum of
the annual phase-in percentage for the year and the annual
phase-in percentages for each previous year beginning with
2011, but in no case more than 100 percent.
``(E) Out-of-pocket gap amount.--For purposes of this
paragraph, the term `out-of-pocket gap amount' means for a
year the amount by which--
``(i) the annual out-of-pocket threshold specified in
paragraph (4)(B) for the year (as determined as if this
paragraph did not apply), exceeds
``(ii) the sum of--

``(I) the annual deductible under paragraph (1) for the
year; and
``(II) \1/4\ of the amount by which the initial coverage
limit under paragraph (3) for the year (as determined as if
this paragraph did not apply) exceeds such annual
deductible.''.

(c) Requiring Drug Manufacturers To Provide Drug Rebates
for Full-Benefit Dual Eligibles.--
(1) In general.--Section 1860D-2 of the Social Security Act
(42 U.S.C. 1396r-8) is amended--
(A) in subsection (e)(1), in the matter before subparagraph
(A), by inserting ``and subsection (f)'' after ``this
subsection''; and
(B) by adding at the end the following new subsection:
``(f) Prescription Drug Rebate Agreement for Full-Benefit
Dual Eligible Individuals.--
``(1) In general.--In this part, the term `covered part D
drug' does not include any drug or biologic that is
manufactured by a manufacturer that has not entered into and
have in effect a rebate agreement described in paragraph (2).
``(2) Rebate agreement.--A rebate agreement under this
subsection shall require the manufacturer to provide to the
Secretary a rebate for each rebate period (as defined in
paragraph (6)(B)) ending after December 31, 2010, in the
amount specified in paragraph (3) for any covered part D drug
of the manufacturer dispensed after December 31, 2010, to any
full-benefit dual eligible individual (as defined in
paragraph (6)(A)) for which payment was made by a PDP sponsor
under part D or a MA organization under part C for such
period. Such rebate shall be paid by the manufacturer to the
Secretary not later than 30 days after the date of receipt of
the information described in section 1860D-12(b)(7),
including as such section is applied under section
1857(f)(3).
``(3) Rebate for full-benefit dual eligible medicare drug
plan enrollees.--
``(A) In general.--The amount of the rebate specified under
this paragraph for a manufacturer for a rebate period, with
respect to each dosage form and strength of any covered part
D drug provided by such manufacturer and dispensed to a full-
benefit dual eligible individual, shall be equal to the
product of--
``(i) the total number of units of such dosage form and
strength of the drug so provided and dispensed for which
payment was made by a PDP sponsor under part D or a MA
organization under part C for the rebate period (as reported
under section 1860D-12(b)(7), including as such section is
applied under section 1857(f)(3)); and
``(ii) the amount (if any) by which--

``(I) the Medicaid rebate amount (as defined in
subparagraph (B)) for such form, strength, and period,
exceeds
``(II) the average Medicare drug program full-benefit dual
eligible rebate amount (as defined in subparagraph (C)) for
such form, strength, and period.

``(B) Medicaid rebate amount.--For purposes of this
paragraph, the term `Medicaid rebate amount' means, with
respect to each dosage form and strength of a covered part D
drug provided by the manufacturer for a rebate period--
``(i) in the case of a single source drug or an innovator
multiple source drug, the amount specified in paragraph
(1)(A)(ii) of section 1927(b) plus the amount, if any,
specified in paragraph (2)(A)(ii) of such section, for such
form, strength, and period; or
``(ii) in the case of any other covered outpatient drug,
the amount specified in paragraph (3)(A)(i) of such section
for such form, strength, and period.
``(C) Average medicare drug program full-benefit dual
eligible rebate amount.--For purposes of this subsection, the
term `average Medicare drug program full-benefit dual
eligible rebate amount' means, with respect to each dosage
form and strength of a covered part D drug provided by a
manufacturer for a rebate period, the sum, for all PDP
sponsors under part D and MA organizations administering a
MA-PD plan under part C, of--
``(i) the product, for each such sponsor or organization,
of--

``(I) the sum of all rebates, discounts, or other price
concessions (not taking into account any rebate provided
under paragraph (2) for such dosage form and strength of the
drug dispensed, calculated on a per-unit basis, but only to
the extent that any such rebate, discount, or other price
concession applies equally to drugs dispensed to full-benefit
dual eligible Medicare drug plan enrollees and drugs
dispensed to PDP and MA-PD enrollees who are not full-benefit
dual eligible individuals; and
``(II) the number of the units of such dosage and strength
of the drug dispensed during the rebate period to full-
benefit dual eligible individuals enrolled in the
prescription drug plans administered by the PDP sponsor or
the MA-PD plans administered by the MA-PD organization;
divided by

``(ii) the total number of units of such dosage and
strength of the drug dispensed during the rebate period to
full-benefit dual eligible individuals enrolled in all
prescription drug plans administered by PDP sponsors and all
MA-PD plans administered by MA-PD organizations.
``(4) Length of agreement.--The provisions of paragraph (4)
of section 1927(b) (other than clauses (iv) and (v) of
subparagraph (B)) shall apply to rebate agreements under this
subsection in the same manner as such paragraph applies to a
rebate agreement under such section.
``(5) Other terms and conditions.--The Secretary shall
establish other terms and conditions of the rebate agreement
under this subsection, including terms and conditions related
to compliance, that are consistent with this subsection.
``(6) Definitions.--In this subsection and section 1860D-
12(b)(7):
``(A) Full-benefit dual eligible individual.--The term
`full-benefit dual eligible individual' has the meaning given
such term in section 1935(c)(6).
``(B) Rebate period.--The term `rebate period' has the
meaning given such term in section 1927(k)(8).''.
(2) Reporting requirement for the determination and payment
of rebates by manufactures related to rebate for full-benefit
dual eligible medicare drug plan enrollees.--
(A) Requirements for pdp sponsors.--Section 1860D-12(b) of
the Social Security Act (42 U.S.C. 1395w-112(b)) is amended
by adding at the end the following new paragraph:
``(7) Reporting requirement for the determination and
payment of rebates by manufacturers related to rebate for
full-benefit dual eligible medicare drug plan enrollees.--
``(A) In general.--For purposes of the rebate under section
1860D-2(f) for contract years beginning on or after January
1, 2011, each contract entered into with a PDP sponsor under
this part with respect to a prescription drug plan shall
require that the sponsor comply with subparagraphs (B) and
(C).

[[Page S12344]]

``(B) Report form and contents.--Not later than 60 days
after the end of each rebate period (as defined in section
1860D-2(f)(6)(B)) within such a contract year to which such
section applies, a PDP sponsor of a prescription drug plan
under this part shall report to each manufacturer--
``(i) information (by National Drug Code number) on the
total number of units of each dosage, form, and strength of
each drug of such manufacturer dispensed to full-benefit dual
eligible Medicare drug plan enrollees under any prescription
drug plan operated by the PDP sponsor during the rebate
period;
``(ii) information on the price discounts, price
concessions, and rebates for such drugs for such form,
strength, and period;
``(iii) information on the extent to which such price
discounts, price concessions, and rebates apply equally to
full-benefit dual eligible Medicare drug plan enrollees and
PDP enrollees who are not full-benefit dual eligible Medicare
drug plan enrollees; and
``(iv) any additional information that the Secretary
determines is necessary to enable the Secretary to calculate
the average Medicare drug program full-benefit dual eligible
rebate amount (as defined in paragraph (3)(C) of such
section), and to determine the amount of the rebate required
under this section, for such form, strength, and period.
Such report shall be in a form consistent with a standard
reporting format established by the Secretary.
``(C) Submission to secretary.--Each PDP sponsor shall
promptly transmit a copy of the information reported under
subparagraph (B) to the Secretary for the purpose of audit
oversight and evaluation.
``(D) Confidentiality of information.--The provisions of
subparagraph (D) of section 1927(b)(3), relating to
confidentiality of information, shall apply to information
reported by PDP sponsors under this paragraph in the same
manner that such provisions apply to information disclosed by
manufacturers or wholesalers under such section, except--
``(i) that any reference to `this section' in clause (i) of
such subparagraph shall be treated as being a reference to
this section;
``(ii) the reference to the Director of the Congressional
Budget Office in clause (iii) of such subparagraph shall be
treated as including a reference to the Medicare Payment
Advisory Commission; and
``(iii) clause (iv) of such subparagraph shall not apply.
``(E) Oversight.--Information reported under this paragraph
may be used by the Inspector General of the Department of
Health and Human Services for the statutorily authorized
purposes of audit, investigation, and evaluations.
``(F) Penalties for failure to provide timely information
and provision of false information.--In the case of a PDP
sponsor--
``(i) that fails to provide information required under
subparagraph (B) on a timely basis, the sponsor is subject to
a civil money penalty in the amount of $10,000 for each day
in which such information has not been provided; or
``(ii) that knowingly (as defined in section 1128A(i))
provides false information under such subparagraph, the
sponsor is subject to a civil money penalty in an amount not
to exceed $100,000 for each item of false information.
Such civil money penalties are in addition to other penalties
as may be prescribed by law. The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a civil
money penalty under this subparagraph in the same manner as
such provisions apply to a penalty or proceeding under
section 1128A(a).''.
(B) Application to ma organizations.--Section 1857(f)(3) of
the Social Security Act (42 U.S.C. 1395w-27(f)(3)) is amended
by adding at the end the following:
``(D) Reporting requirement related to rebate for full-
benefit dual eligible medicare drug plan enrollees.--Section
1860D-12(b)(7).''.
(3) Deposit of rebates into medicare prescription drug
account.--Section 1860D-16(c) of such Act (42 U.S.C. 1395w-
116(c)) is amended by adding at the end the following new
paragraph:
``(6) Rebate for full-benefit dual eligible medicare drug
plan enrollees.--Amounts paid under a rebate agreement under
section 1860D-2(f) shall be deposited into the Account and
shall be used to pay for all or part of the gradual
elimination of the coverage gap under section 1860D-
2(b)(7).''.
(d) Sunset of Medicare Coverage Gap Discount Program.--
Section 3301 of this Act is amended by adding at the end the
following new subsection:
``(e) Sunset of Medicare Coverage Gap Discount Program.--
The amendments made by this section shall cease to be
effective as of the date on which there is a continuation of
coverage from the initial coverage limit for expenditures
incurred through the total amount of expenditures at which
benefits are available under section 1860D-2(b)(4).''.
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