(a) Total rebate. (1) Subject to paragraph (b) of this section, the total rebate amount to be paid by a manufacturer for a Part D rebatable drug, identified as set forth in § 428.101, for an applicable period is equal to:

(i) The product of the per unit Part D rebate amount of such drug, as determined under § 428.202(a), and the total number of units dispensed of such drug under Part D, as determined under § 428.203; or

(ii) In the case of a Part D rebatable drug that is a line extension of a Part D rebatable drug that is an oral solid dosage form, the amount determined under § 428.204.

(2) The rebate amount may be reduced in accordance with subpart D of this part or adjusted in accordance with subpart E of this part.

(b) Drugs and biologicals excluded from Part D rebate calculations. CMS will exclude from the Part D drug inflation rebate calculations described in this subpart—

(1) Drugs and biologicals that meet the definition of a Part D rebatable drug but whose manufacturers do not have an agreement in effect with the HHS Secretary under section 1927 of the Act at any point during the applicable period, as determined by CMS through consultation with Medicaid Drug Rebate Program staff and review of the Medicaid Drug Programs system.

(2) Drugs and biologicals that meet the definition of a Part D rebatable drug but, for the entire duration of the applicable period, are excluded from the definition of covered outpatient drugs as defined in section 1927(k)(2)-(4) of the Act and § 447.502 of this chapter, as determined by CMS through consultation with Medicaid Drug Rebate Program staff and review of the Medicaid Drug Programs system.