(a) Formula for calculating the per unit Part D rebate amount. CMS will calculate the per unit Part D drug inflation rebate amount for a Part D rebatable drug and applicable period by determining the amount by which the AnMP for the Part D rebatable drug, as calculated in accordance with paragraph (b) of this section, exceeds the inflation-adjusted payment amount, as calculated in accordance with paragraph (f) of this section.
(b) Calculation of the AnMP for the applicable period. Subject to paragraph (g) of this section, CMS will calculate the AnMP for a Part D rebatable drug using the AMP reported by a manufacturer under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act for each calendar quarter of the applicable period and units reported by a manufacturer under section 1927(b)(3)(A)(iv) of the Act for each month of the applicable period.
(1) CMS will calculate the AnMP for a Part D rebatable drug as the sum of the following:
(i) The product of—
(A) The AMP for the Part D rebatable drug reported for the calendar quarter beginning October of the applicable period; and
(B) The sum of the monthly units reported for the calendar quarter beginning October of the applicable period divided by the sum of the monthly units reported for the 4 calendar quarters in the applicable period.
(ii) The product of—
(A) The AMP for the Part D rebatable drug reported for the calendar quarter beginning January of the applicable period; and
(B) The sum of the monthly units reported for the calendar quarter beginning January of the applicable period divided by the sum of the monthly units reported for the 4 calendar quarters in the applicable period.
(iii) The product of—
(A) The AMP for the Part D rebatable drug reported for the calendar quarter beginning April of the applicable period; and
(B) The sum of the monthly units reported for the calendar quarter beginning April of the applicable period divided by the sum of the monthly units reported for the 4 calendar quarters in the applicable period.
(iv) The product of—
(A) The AMP for the Part D rebatable drug reported for the calendar quarter beginning July of the applicable period; and
(B) The sum of the monthly units reported for the calendar quarter beginning July of the applicable period divided by the sum of the monthly units reported for the 4 calendar quarters in the applicable period.
(2) The first applicable period for a Part D rebatable drug will be the earliest applicable period that follows the payment amount benchmark period identified as set forth in paragraphs (c)(1) through (4) of this section.
(c) Identification of the payment amount benchmark period. As applicable under this paragraph, CMS will use information reported by a manufacturer under section 1927(b)(3) of the Act, including without limitation the date of FDA approval or licensure and the first marketed date, to identify the payment amount benchmark period as set forth in paragraphs (c)(1) and (2) of this section, subject to paragraphs (c)(3) through (5) of this section:
(1) For a Part D rebatable drug first approved or licensed by the FDA on or before October 1, 2021, the payment amount benchmark period is the period beginning on January 1, 2021, and ending on September 30, 2021;
(2) For a subsequently approved drug, the payment amount benchmark period is the first calendar year beginning after the drug's first marketed date;
(3) Notwithstanding paragraph (c)(1) of this section, for a Part D rebatable drug first approved or licensed by the FDA on or before October 1, 2021, for which there are no quarters during the period beginning on January 1, 2021, and ending on September 30, 2021, for which AMP has been reported under section 1927(b)(3) of the Act for the NDC-9, including information as set forth in paragraph (d)(3), the payment amount benchmark period is the first calendar year no earlier than calendar year 2021 in which such NDC-9 has at least 1 quarter of AMP reported;
(4) Notwithstanding paragraph (c)(2) of this section, for a subsequently approved drug for which there are no quarters during the first calendar year beginning after the drug's first marketed date for which AMP has been reported under section 1927(b)(3) of the Act for the NDC-9, including information as set forth in paragraph (d)(3) of this section, the payment amount benchmark period is the first calendar year in which such NDC-9 has at least 1 quarter of AMP reported; and
(5) Notwithstanding paragraphs (c)(1) through (4) of this section, for a Part D rebatable drug that is a selected drug (as defined in section 1192(c) of the Act) with respect to a price applicability period (as defined in section 1191(b)(2) of the Act), in the case such Part D rebatable drug is no longer considered to be a selected drug, for each applicable period beginning after the price applicability period with respect to such drug, the payment amount benchmark period is the last calendar year of such price applicability period with respect to such selected drug.
(d) Calculation of benchmark period manufacturer price. Subject to paragraphs (d)(3) and (g) of this section, CMS will calculate the benchmark period manufacturer price for a Part D rebatable drug using the AMP reported by a manufacturer under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act for each calendar quarter of the payment amount benchmark period and the monthly units reported by a manufacturer under section 1927(b)(3)(A)(iv) of the Act during the payment amount benchmark period.
(1) For a Part D rebatable drug with a payment amount benchmark period identified as set forth in paragraph (c)(1) of this section, CMS will calculate the benchmark period manufacturer price as the sum of the following:
(i) The product of—
(A) The AMP reported for the calendar quarter beginning January 2021; and
(B) The sum of the monthly units reported for the calendar quarter beginning January 2021 divided by the sum of the monthly units reported for the 3 quarters of the payment amount benchmark period.
(ii) The product of—
(A) The AMP reported for the calendar quarter beginning April 2021; and
(B) The sum of the monthly units reported for the calendar quarter beginning April 2021 divided by the sum of the monthly units reported for the 3 quarters of the payment amount benchmark period.
(iii) The product of—
(A) The AMP reported for the calendar quarter beginning July 2021; and
(B) The sum of the monthly units reported for the calendar quarter beginning July 2021 divided by the sum of the units reported for the 3 quarters of the payment amount benchmark period.
(2) For a Part D rebatable drug with a payment amount benchmark period identified under paragraphs (c)(2) through (5) of this section, CMS will calculate the benchmark period manufacturer price as the sum of the following:
(i) The product of—
(A) The AMP reported for the calendar quarter beginning January of the payment amount benchmark period; and
(B) The sum of the monthly units reported for the calendar quarter beginning January of the payment amount benchmark period divided by the sum of the monthly units reported for the 4 quarters of the payment amount benchmark period.
(ii) The product of—
(A) The AMP reported for the calendar quarter beginning April of the payment amount benchmark period; and
(B) The sum of the monthly units reported for the calendar quarter beginning April of the payment amount benchmark period divided by the sum of the monthly units reported for the 4 quarters of the payment amount benchmark period.
(iii) The product of—
(A) The AMP reported for the calendar quarter beginning July of the payment amount benchmark period; and
(B) The sum of the monthly units reported for the calendar quarter beginning July of the payment amount benchmark period divided by the sum of the monthly units reported for the 4 quarters of the payment amount benchmark period.
(iv) The product of—
(A) The AMP reported for the calendar quarter beginning in October of the payment amount benchmark period; and
(B) The sum of the monthly units reported for the calendar quarter beginning October of the payment amount benchmark period divided by the sum of the monthly units reported for the 4 quarters of the payment amount benchmark period.
(3) To the extent that a new NDC-9 of a Part D rebatable drug is reported under section 1927 of the Act and AMP has not been reported for such NDC-9 under section 1927(b)(3)(A)(i)(I) or (ii) of the Act during the period set forth in paragraph (c)(1) or (2) of this section, as applicable, CMS will identify the payment amount benchmark period and calculate the benchmark period manufacturer price for such NDC-9 using other information reported by a manufacturer under section 1927(b)(3) of the Act for the Part D rebatable drug, as available, such as the base date AMP if such base date AMP is reported for a calendar quarter that overlaps with the period set forth in paragraph (c)(1) or (2) of this section. Base date AMP has the meaning set forth in § 447.509(a)(7)(ii)(B) of this title.
(e) Identification of the benchmark period CPI-U. For each Part D rebatable drug, CMS will identify the benchmark period CPI-U as set forth in paragraphs (e)(1) and (2) of this section, subject to paragraphs (e)(3) through (5) of this section:
(1) For a Part D rebatable drug first approved or licensed by the FDA on or before October 1, 2021, the benchmark period CPI-U is the CPI-U for January 2021.
(2) For a subsequently approved drug, the benchmark period CPI-U is the CPI-U for January of the first calendar year beginning after a drug's first marketed date.
(3) Notwithstanding paragraph (e)(1) of this section, for a Part D rebatable drug first approved or licensed by the FDA on or before October 1, 2021, for which there are no quarters during the period beginning on January 1, 2021, and ending on September 30, 2021, for which AMP has been reported under section 1927(b)(3) of the Act for the NDC-9, including information as set forth in paragraph (d)(3) of this section, the benchmark period CPI-U is the CPI-U for January of the payment amount benchmark period identified under paragraph (c)(3) of this section.
(4) Notwithstanding paragraph (e)(2) of this section, for a subsequently approved drug for which there are no quarters during the first calendar year beginning after the drug's first marketed date for which AMP has been reported under section 1927(b)(3) of the Act for the NDC-9, including information as set forth in paragraph (d)(3) of this section, the benchmark period CPI-U is the CPI-U for January of the payment amount benchmark period identified as set forth in paragraph (c)(4) of this section.
(5) Notwithstanding paragraphs (e)(1) through (4) of this section, for a drug that is a selected drug (as defined in section 1192(c) of the Act) with respect to a price applicability period (as defined in section 1191(b)(2) of the Act), in the case such Part D rebatable drug is no longer considered to be a selected drug, the benchmark period CPI-U is the CPI-U for January of the last calendar year of such price applicability period.
(f) Calculation of inflation-adjusted payment amount. For an applicable period for each Part D rebatable drug, CMS will calculate the inflation-adjusted payment amount by dividing the applicable period CPI-U by the benchmark period CPI-U and then multiplying the quotient by the benchmark period manufacturer price.
(g) Situations in which manufacturers do not report units under section 1927(b)(3)(A)(iv) of the Act. For the purpose of calculating the AnMP as determined under paragraph (b) of this section and the benchmark period manufacturer price as determined under paragraph (d) of this section—
(1) If there is 1 or more quarter(s) in the payment amount benchmark period or applicable period for which a manufacturer has not reported units under section 1927(b)(3)(A)(iv) of the Act but has reported AMP under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act, CMS will calculate the benchmark period manufacturer price or AnMP, as applicable, using data only from quarter(s) with units. Quarter(s) in the payment amount benchmark period or applicable period for which a manufacturer has not reported units under section 1927(b)(3)(A)(iv) of the Act will be excluded from the calculation.
(2) If there are no quarters of the payment amount benchmark period or applicable period for which a manufacturer has reported units under section 1927(b)(3)(A)(iv) of the Act, but the manufacturer has reported AMP under sections 1927(b)(3)(A)(i)(I) and (ii) of the Act for at least 1 quarter of such period or, with respect to paragraph (d)(3), there exists other information reported by a manufacturer under section 1927(b)(3) of the Act for the Part D rebatable drug to identify the payment amount benchmark period, CMS will use the AMP or other information as applicable as set forth in paragraph (d)(3) reported for 1 quarter to calculate the benchmark period manufacturer price or AnMP, respectively. If AMP is reported for more than 1 quarter, CMS will use the average of the AMP over the calendar quarters of the payment amount benchmark period or applicable period for which AMP is reported to calculate the benchmark period manufacturer price or AnMP, respectively.