Medicare Program; Medicare Coverage Gap Discount Program Model Manufacturer Agreement and Announcement of the June 1, 2010 Public Meeting, 29555-29559 [2010-12559]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 75, Number 101 (Wednesday, May 26, 2010)]
[Notices]
[Pages 29555-29559]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-12559]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-4151-NC]
RIN 0938-AQ04


Medicare Program; Medicare Coverage Gap Discount Program Model 
Manufacturer Agreement and Announcement of the June 1, 2010 Public 
Meeting

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice with comment period.

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SUMMARY: This notice with comment period contains a draft model 
agreement for use by the Secretary and manufacturers under the Medicare 
Coverage Gap Discount Program established by section 3301 of the 
Patient Protection and Affordable Care Act, as amended by section 1101 
of the Health Care and Education Reconciliation Act of 2010. Under the 
agreement, manufacturers of applicable covered Part D drugs must 
provide applicable discounts to applicable Medicare beneficiaries for 
applicable covered Part D drugs while in the coverage gap beginning in 
2011. It also announces the June 1, 2010 public meeting regarding the 
draft model agreement.

DATES: Meeting Date: Tuesday, June 1, 2010, 9 a.m. to 5:30 p.m., 
eastern daylight time (e.d.t.).
    Meeting Registration and Request for Special Accommodations 
Deadline: Register between May 21, 2010 and June 1, 2010.
    Comment Date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
e.d.t on June 21, 2010.

ADDRESSES: Meeting Location: The meeting will be held in the Sheraton 
Baltimore City Center Hotel, 101 West Fayette Street, Baltimore, MD 
21201.
    Registration and Special Accommodations: Register and request 
special accommodations at https://cmsconference.hcmsllc.com.
    Submitting Comments: In commenting, please refer to file code CMS-
4151-NC. Because of staff and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
notice to https://www.regulations.gov. Follow the instructions ``For 
submitting a comment.''
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-4151-NC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-4151-NC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Craig Miner, for questions regarding 
the model agreement, (410) 786-7937. Sonia Eaddy, for questions 
regarding the meeting registration, 410-786-5459.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following Web site as soon as possible after they have been 
received: https://www.regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

    Section 101 of the Medicare Prescription Drug, Improvement and 
Modernization Act of 2003 (MMA) which was enacted on December 8, 2003 
established the Voluntary Prescription Drug Benefit Program 
(hereinafter referred to as ``Part D''). The Part D program is 
available for individuals who are entitled to Medicare Part A or 
enrolled in Medicare Part B. The Centers for Medicare & Medicaid 
Services (CMS) contracts with private companies, referred to as Part D 
sponsors, to administer the Part D program via stand alone prescription 
drug plans (PDPs) and prescription drug plans offered by Medicare 
Advantage Organizations (MA-PDs). The Part D program became effective 
January 1, 2006.
    Standard Part D prescription drug coverage consists of coverage 
subject to an annual deductible, 25 percent coinsurance (or an 
actuarially equivalent cost-sharing design) up to the initial coverage 
limit (ICL), and catastrophic coverage for individuals that exceed the 
annual maximum true out-of-pocket (TrOOP) threshold with cost-sharing 
equal to the greater of a $2/$5 copayment or coinsurance of 5

[[Page 29556]]

percent. Under the standard coverage, individuals that do not receive 
additional cost-sharing subsidies from CMS or additional coverage by 
other secondary payers (for example, State Pharmaceutical Assistance 
Programs) are responsible for paying 100 percent of the Part D 
negotiated price for covered Part D claims above the ICL until their 
TrOOP costs exceed the annual threshold amount.
    Section 3301 of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by section 1101 of the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152) (these public 
laws are collectively known as the Affordable Care Act), establishes 
the Medicare Coverage Gap Discount Program (Discount Program) by adding 
sections 1860D-43 and 1860D-14A of the Social Security Act (Act). 
Effective January 1, 2011, the Discount Program will make manufacturer 
discounts available to applicable Medicare beneficiaries receiving 
applicable covered Part D drugs while in the coverage gap. In general, 
the discount on each applicable covered Part D drug is 50 percent of an 
amount equal to the negotiated price (as defined in section 1860D-
14A(g)(6) of the Act).
    Beginning January 1, 2011, an applicable Part D drug will only be 
covered under Part D if the manufacturer has a signed agreement with 
the Secretary to participate in the Discount Program, provides 
applicable discounts on coverage gap claims for all of its applicable 
drugs, and remains in compliance with the terms of that agreement. The 
requirement to sign an agreement applies to manufacturers of applicable 
Part D drugs. However, the Secretary reserves the right to require all 
manufacturers to sign the agreement in the future if we discover that 
access to applicable Part D drugs is restricted. We also encourage 
manufacturers of non-applicable drugs to enter into an agreement if 
they intend to manufacture applicable Part D drugs in the future.
    While section 1860D-43(c) of the Act permits us to allow coverage 
of drugs not covered under an agreement if we determine that 
availability of the drug is essential to the health of beneficiaries 
or, for 2011 only, that there are extenuating circumstances, we do not 
intend to apply this authority as we fully expect all manufacturers of 
applicable drugs to sign the agreement so that there will be no changes 
in the availability of coverage for Part D drugs. We will notify the 
public as early as possible if certain manufacturers have failed to 
sign an agreement.

II. Provisions of the Notice

A. Draft of the Model Manufacturer Agreement

    Pursuant to section 1860D-14A(d)(5) of the Act, the Secretary is 
authorized to implement the Discount Program ``by program instruction 
or otherwise.'' Accordingly, in the Addendum to this notice with 
comment period, we provide a draft of the model manufacturer agreement 
for use in the program that a manufacturer must enter into with the 
Secretary agreeing to provide the applicable discount on coverage gap 
claims by applicable beneficiaries for all of its applicable drugs if 
it wants its drugs to be covered under Part D. We intend to use the 
model manufacturer agreement as a standard agreement that will not be 
subject to further revision based on negotiations with individual 
manufacturers. The model manufacturer agreement will be finalized and 
posted on the CMS Web site after we have considered the public comments 
and consulted with manufacturers as required by section 1860D-14A(a) of 
the Act.

B. Meeting Regarding Draft Model Manufacturer Agreement

    The following is the tentative agenda for the June 1, 2010 meeting:

9-9:30 Opening Remarks
9:30-10:30 CMS Overview of Administration of Discount Program--15 
minutes
    CMS Overview of PDE Records-45 minutes
10:30-11 Q&A Session
11-11:15 Break
11:15-11:45 CMS Review of Draft Manufacturer Agreement
11:45-12:15 Q&A Session
12:15-1:30 Lunch
1:30-2:30 Beneficiary Advocate Panel
2:30-3:30 Part D Plan Sponsor/PBM Panel
3:30-3:45 Break
3:45-5:15 Pharmaceutical Manufacturer Panel
5:15-5:30 Closing remarks.

III. Collection of Information Requirements

    In accordance with section 1860D-14A(d)(6) of the Affordable Care 
Act, Chapter 35 of title 44, United States Code shall not apply to the 
program under this section. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

ADDENDUM--Draft Model Agreement

Medicare Coverage Gap Discount Program Agreement Between the Secretary 
of Health and Human Services (Hereinafter Referred to as ``the 
Secretary'') and the Manufacturer Identified in Section IX of This 
Agreement (Hereinafter Referred to as ``the Manufacturer'')

    The Secretary, on behalf of the Department of Health and Human 
Services, and the Manufacturer, on its own behalf, for purposes of 
sections 1860D-14A and 1860D-43 of the Social Security Act (the Act), 
as set forth in the Patient Protection and Affordable Care Act of 2010, 
Public Law 111-148, and the Health Care and Education Reconciliation 
Act of 2010, Public Law 111-152, collectively known as the Affordable 
Care Act, hereby agree to the following:

I. Definitions

    The terms defined in this section will, for the purposes of this 
Agreement, have the meanings specified in sections 1860D-1 through 
1860D-43 of the Act as interpreted and applied herein:
    (a) ``Applicable Beneficiary'' means an individual who, on the date 
of dispensing a covered Part D drug:
    1. Is enrolled in a prescription drug plan or an MA-PD plan;
    2. Is NOT enrolled in a qualified retiree prescription drug plan;
    3. Is NOT entitled to an income-related subsidy under 1860D-14(a) 
of the Act;
    4. Has reached or exceeded the initial coverage limit under section 
1860D-2(b)(3) of the Act during the year; and
    5. Has NOT incurred costs for covered Part D drugs in the year 
equal to the annual out-of-pocket threshold specified in section 1860D-
2(b)(4)(B) of the Act. This does not mean that an applicable 
beneficiary who has already moved through the coverage gap is not 
eligible for applicable discounts for applicable drugs dispensed while 
the applicable beneficiary was in the coverage gap.
    (b) ``Applicable Drug'' means, with respect to an applicable 
beneficiary, a covered Part D drug--
    1. Approved under a new drug application under section 505(b) of 
the Federal Food, Drug, and Cosmetic Act

[[Page 29557]]

(FDCA) or, in the case of a biological product, licensed under section 
351 of the Public Health Service Act (PHSA) (other than a product 
licensed under subsection (k) of such section 351 of PHSA); and
    2.i. If the PDP sponsor of the prescription drug plan or the MA 
organization offering the MA-PD plan uses a formulary, which is on the 
formulary of the prescription drug plan or MA-PD plan that the 
applicable beneficiary is enrolled in;
    ii. If the PDP sponsor of the prescription drug plan or the MA 
organization offering the MA-PD plan does not use a formulary, for 
which benefits are available under the prescription drug plan or MA-PD 
plan that the applicable beneficiary is enrolled in; or
    iii. Is provided through an exception or appeal.
    (c) ``Applicable Discount'' means 50 percent of the portion of the 
negotiated price (as defined in section I.(m) of this agreement), of 
the applicable drug of a Manufacturer that falls within the coverage 
gap (as defined in section I.(f) of this agreement).
    (d) ``Centers for Medicare & Medicaid Services (CMS)'' means the 
agency of the Department of Health and Human Services having the 
delegated authority to operate the Medicare program.
    (e) ``Contractor'' means the CMS contractor responsible for 
administering the requirements established by the Secretary to carry 
out section 1860D-14A of the Act.
    (f) ``Coverage Gap'' means the gap phase in prescription drug 
coverage that occurs between the initial coverage limit (as defined in 
1860D-2(b)(3) of the Act) and the out-of-pocket threshold (as defined 
in section 1860D-2(b)(4)(B) of the Act). For purposes of applying the 
initial coverage limit, Part D sponsors shall apply their plan-specific 
initial coverage limit under basic alternative actuarially equivalent 
or enhanced alternative Part D benefit designs.
    (g) ``Covered Part D drug'' has the meaning as set forth in 42 CFR 
423.100.
    (h) ``Discount Program'' means the Medicare Coverage Gap Discount 
Program established under section 1860D-14A of the Act.
    (i) ``Labeler Code'' means the first 5 digits in the 11-digit 
national drug code (NDC) format that is assigned by the FDA and 
identifies the Manufacturer.
    (j) ``Manufacturer'' means any entity which is engaged in the 
production, preparation, propagation, compounding, conversion or 
processing of prescription drug products, either directly or 
indirectly, by extraction from substances of natural origin, or 
independently by means of chemical synthesis, or by a combination of 
extraction and chemical synthesis. Such term does not include a 
wholesale distributor of drugs or a retail pharmacy licensed under 
State law.
    (k) ``Medicare Part D Discount Information'' means information sent 
from CMS, or its contractor, to the Manufacturer for the Manufacturer's 
applicable drugs received by applicable beneficiaries for Medicare Part 
D consisting of summary-level information showing the total units 
dispensed and total applicable discounts paid by Part D sponsors for 
each Manufacturer's NDC number during the applicable calendar quarter. 
This information will be derived from applicable data elements 
available on the prescription drug events (PDEs) as determined by CMS.
    (l) ``National Drug Code (NDC)'' means the identifying prescription 
drug product number that is registered and listed with the Food and 
Drug Administration (FDA). For the purposes of this Agreement, the NDC 
refers to either the 9-digit (inclusive of 5 digit labeler code and 4 
digit product code) or 11-digit (inclusive of 5 digit labeler code, 4 
digit product code, and 2 digit package size code) NDC, as designated 
by the Secretary.
    (m) ``Negotiated Price'' has the meaning given such term in 42 CFR 
423.100 (as in effect on the date of enactment of section 1860D-14A of 
the Act), except that such negotiated price shall not include any 
dispensing fee for the applicable drug.
    (n) ``Part D drug'' has the meaning given such term in 42 CFR 
423.100.
    (o) ``Part D Sponsor'' The term Part D sponsor has the meaning 
given such term in section 42 CFR 423.4.
    (p) ``Prescription Drug Event (PDE)'' refers to a summary record 
that documents the final adjudication of a Part D dispensing event.
    (q) ``Qualified Retiree Prescription Drug Plan'' The term qualified 
retiree prescription drug plan has the meaning given such term in 
section 1860D-22(a)(2) of the Act.
    (r) ``Secretary'' means the Secretary of the United States 
Department of Health and Human Services, or any successor thereto, or 
any officer or employee of the Department of Health and Human Services 
or successor agency to whom the authority to implement this Agreement 
has been delegated.

II. Manufacturer's Responsibilities

    In order for Part D coverage to be available for covered Part D 
drugs of a Manufacturer, the Manufacturer agrees to the following:
    (a) To reimburse the applicable discount for all applicable 
discounts provided by Part D sponsors on behalf of the Manufacturer for 
all of the Manufacturer's applicable drugs based upon PDE information 
reported to CMS by Part D sponsors.
    (b) To pay to each Part D sponsor within 14 days of being invoiced 
by the contractor the total quarterly applicable discounts provided by 
each Part D sponsor on behalf of the Manufacturer for all of the 
Manufacturer's applicable drugs provided during a previous specified 
quarter based upon PDE information utilized by CMS (or the contractor) 
to calculate the applicable discounts.
    (c) To collect and have available appropriate data, including data 
related to Manufacturer's labeler codes, expiration date of NDCs, 
utilization and pricing information relied on by the Manufacturer to 
dispute the CMS contractor's discount calculations, and any other data 
the Secretary determines is necessary to carry out the discount 
program, for a period of not less than 10 years to ensure that it can 
demonstrate to the Secretary compliance with the requirements of the 
Discount Program.
    (d) To comply with conditions in sections 1860D-14A and 1860D-43 of 
the Act, and any changes to the Medicare statute that affect the 
Discount Program.
    (e) To comply with the requirements imposed by the Secretary for 
purposes of administering the Discount Program.
    (f) To pay all applicable discounts provided by Part D sponsors on 
behalf of the Manufacturer for all of the Manufacturer's applicable 
drugs for applicable dates of service except for those dates of service 
after the marketing end date, which is the last lot expiration date, 
specified in a product's structured product labeling electronically 
submitted to the FDA if such marketing end date was submitted to the 
FDA prior to such date.
    (g) To submit to periodic audits of data and documentation 
referenced in section II.(c) of this agreement.
    (h) To comply with the payment amount dispute resolution process in 
section V. of this agreement.
    (i) To comply with all applicable confidentiality requirements of 
the Health Insurance Portability and Accountability Act and 45 CFR 
parts 160, 162, and 164.
    (j) To electronically list and maintain an up-to-date electronic 
FDA registration and listing of all NDCs so that CMS and Part D 
sponsors can accurately identify applicable drugs (as defined in 
section I.(b) of this agreement).

[[Page 29558]]

    (k) To enter into and have in effect, under terms and conditions 
specified by the Secretary, a contract with a third party that the 
Secretary has entered into a contract with under section 1860D-
14A(d)(3) of the Act.
    (l) To provide to CMS or its contractor, electronic connectivity to 
receive ``Medicare Part D Discount Information'' reports.
    (m) To make quarterly payments directly to accounts established by 
Part D sponsors via electronic funds transfer within the time period 
specified in subsection (b) of this section and within 1 business day 
of the transfer to provide CMS with electronic documentation in a 
manner specified by CMS that details the successful transmission of 
such payments.

III. Secretary's Responsibilities

    (a) The Secretary shall require Part D sponsors to make applicable 
discounts available at the pharmacy, by mail order service, or at any 
other point of sale for applicable drugs beginning January 1, 2011.
    (b) The Secretary is responsible for monitoring compliance by the 
Manufacturer with the terms of this Agreement.
    (c) The Secretary is responsible for collecting PDE information 
from Part D sponsors for monitoring and tracking the applicable 
discounts provided by Part D sponsors on behalf of Manufacturers for 
applicable drugs and implementing internal control measures designed to 
ensure the accuracy and appropriateness of discount payments provided 
by Part D sponsors.
    (d) The Secretary may audit the Manufacturer periodically with 
respect to the Manufacturer's labeler codes, expiration date of NDCs, 
and utilization and pricing information relied on by the Manufacturer 
to dispute the CMS contractor's discount calculations, and any other 
data the Secretary determines is necessary to carry out the Discount 
program.
    (e) The Secretary shall contract with one or more third parties 
(the contractor) to:
    1. Receive and transmit information, including Medicare Part D 
Discount Information (as defined in section I.(k) of this Agreement), 
between the Secretary, manufacturers, and other individuals or entities 
the Secretary determines appropriate;
    2. Receive, distribute, or facilitate the distribution of funds of 
manufacturers to appropriate individuals or entities in order to meet 
the obligations of manufacturers under this agreement;
    3. Provide adequate and timely information to manufacturers as 
necessary for the manufacturer to fulfill its obligations under this 
Agreement;
    4. Permit manufacturers to conduct periodic audits, directly or 
through contracts, of the data and information used by the contractor 
to determine discounts for applicable drugs of the manufacturer under 
the Discount Program.
    (f) The Secretary shall not disclose any identifying beneficiary 
information in these reports or otherwise under this Discount Program 
except as may be required by a court with competent jurisdiction.
    (g) The Secretary shall be the sole source of information regarding 
beneficiary eligibility to receive the applicable discount and the 
Secretary's determination regarding beneficiary eligibility is not 
subject to audit or dispute by Manufacturer.
    (h) The Secretary shall make public a list of Manufacturer's 
labeler codes that are subject to an existing Discount Program 
Agreement.

IV. Penalty Provisions

    (a) The Secretary may impose a civil monetary penalty on a 
Manufacturer that fails to pay applicable discounts under the Program. 
The amount for each such failure is the amount the Secretary determines 
is commensurate with the sum of the amount that the Manufacturer would 
have paid with respect to such discounts under the Agreement, which 
will then be used to pay the applicable discounts which the 
Manufacturer had failed to provide, plus an additional 25 percent of 
the amount the Manufacturer would have paid with respect to such 
discounts under the agreement.
    (b) The provisions of section 1128A of the Act (other than 
subsections (a) and (b)) shall apply to a civil money penalty in the 
same manner as such provisions apply to a penalty or proceeding under 
section 1128A(a) of the Act.

V. Payment Amount Dispute Resolution

    (a) In the event that a Manufacturer disputes the Medicare Part D 
Discount Information provided by CMS on the periodic summary, the 
Manufacturer shall provide written notice of the disputed information, 
by NDC number, to CMS and its contractor within 60 days of receipt of 
the information. The disputed information must be material, specific 
and related to the dispute at issue, and supported by evidence provided 
to the Secretary that establishes the basis of such dispute.
    (b) The Manufacturer shall not withhold any invoiced discount 
payments pending dispute resolution.
    (c) The Manufacturer and contractor will use their best efforts to 
resolve the dispute within 60 days of receipt of such notification. If 
the dispute is not resolved within 60 days, CMS will provide for an 
independent review and determination by an entity specified by CMS 
within 120 days of receipt of notification. If the Manufacturer 
disagrees with the determination, the Manufacturer may request review 
by the CMS Administrator. The decision by the CMS Administrator is 
final and binding.
    (d) Adjustments to future applicable discount payments shall be 
made if new information demonstrates that either there have been 
material changes in Medicare Part D Discount Information or the 
negotiated prices originally used to compute previous applicable 
discount payments.

VI. Confidentiality Provisions

    (a) Information disclosed by the manufacturer and deemed by the 
manufacturer and the Secretary to be confidential in connection with 
this Agreement is confidential and will not be disclosed by the 
Secretary in a form which reveals the manufacturer, except as necessary 
to carry out provisions of section 1860D-14A of the Act and for 
purposes authorized in section 1860D-15(f)(2) of the Act.
    (b) Information disclosed to Manufacturers pursuant to this 
agreement shall only be used for purposes of paying the discount under 
the Discount Program. CMS or the contractor will only disclose to 
manufacturers the minimum data necessary for manufacturers to fulfill 
their obligations under this Agreement.
    (c) Except where otherwise specified in the Act or Agreement, the 
Manufacturer will observe applicable State confidentiality statutes, 
regulations and other applicable confidentiality requirements.
    (d) Notwithstanding the nonrenewal or termination of this Agreement 
for any reason, the confidentiality provisions of this Agreement will 
remain in full force and effect with respect to information disclosed 
under this Agreement prior to such nonrenewal or termination.

VII. Nonrenewal and Termination

    (a) Unless otherwise terminated by either party pursuant to the 
terms of this Agreement, the Agreement shall be effective for an 
initial period of not less than 24 months beginning on January 1, 2011 
and shall be automatically renewed for a period of 1 year unless 
terminated under section VII.(b) or (c) of this Agreement.
    (b) The Secretary may terminate this Agreement for a knowing and 
willful

[[Page 29559]]

violation of the requirements of the Agreement or other good cause 
shown. The termination shall not be effective earlier than 30 days 
after the date of notice to the Manufacturer of such termination.
    (c) The Secretary shall provide, upon request, a Manufacturer a 
hearing with a hearing officer concerning such termination if requested 
in writing within 15 days of receiving notice of the termination, and 
such hearing shall take place prior to the effective date of the 
termination with sufficient time for such effective date to be repealed 
if the Secretary determines appropriate. If the Manufacturer receives 
an unfavorable decision from the hearing officer, the Manufacturer may 
request review by the CMS Administrator. The decision of the CMS 
Administrator is final and binding.
    (d) The Manufacturer may terminate this Agreement for any reason. 
Any such termination shall be effective as of the day after the end of 
the plan year if the termination occurs before January 30 of a plan 
year or as of the day after the end of the succeeding plan year if the 
termination occurs on or after January 30 of a plan year.
    (e) Any termination shall not affect applicable discounts for 
applicable drugs of the Manufacturer that were incurred under the 
Agreement before the effective date of its termination.
    (f) Manufacturer reinstatement will be available only upon payment 
of any and all outstanding applicable discounts incurred during any 
previous period of the Agreement. The timing of any such reinstatements 
will be consistent with the requirements for entering into an Agreement 
under section 1860D-14A(b)(1)(C) of the Act.

VIII. General Provisions

    (a) Any notice required to be given pursuant to the terms and 
provisions of this Agreement will be sent in writing.
    1. Notice to the Secretary will be sent to: Center for Medicare, 
Division of Pharmaceutical Manufacturer Management, Mailstop C1-26-16, 
7500 Security Boulevard, Baltimore, MD 21244-1850.
    2. The CMS address may be updated upon written notice to the 
Manufacturer.
    3. Notices to the Manufacturer will be sent to the address as 
provided with this Agreement and updated upon Manufacturer notification 
to CMS at the address in this Agreement.
    (b) In the event of a transfer in ownership of the Manufacturer or 
product, this Agreement is automatically assigned to the new owner, and 
all terms and conditions of this Agreement remain in effect.
    (c) Nothing in this Agreement will be construed to require or 
authorize the commission of any act contrary to law. If any provision 
of this Agreement is found to be invalid by a court of law with 
competent jurisdiction, this Agreement will be construed in all 
respects as if any invalid or unenforceable provision were eliminated, 
and without any effect on any other provision.
    (d) Nothing in this Agreement shall be construed as a waiver or 
relinquishment of any legal rights of the Manufacturer or the Secretary 
under the Constitution, the Act, other Federal laws, or State laws.
    (e) This Agreement shall be construed in accordance with Federal 
law and ambiguities shall be interpreted in the manner which best 
effectuates the statutory scheme.
    (f) The terms ``Medicare'' and ``Manufacturer'' incorporate any 
contractors which fulfill responsibilities pursuant to the Agreement 
unless specifically provided for in this Agreement or specifically 
agreed to by an appropriate CMS official in accordance with paragraph 
(g) of this section.
    (g) Except for the conditions specified in section VIII.(a) of this 
Agreement, this Agreement once finalized, will not be altered by the 
parties.
    (h) Nothing in this Agreement shall be construed as requiring 
coverage under Part D of a Manufacturer's product if that product does 
not otherwise meet the definition of a covered Part D drug under 42 CFR 
423.100.

IX. Signatures

FOR THE SECRETARY OF HEALTH AND HUMAN SERVICES

By:--------------------------------------------------------------------

(please print name)
-----------------------------------------------------------------------

(signature)

Title:-----------------------------------------------------------------

Date:------------------------------------------------------------------

ACCEPTED FOR THE MANUFACTURER

    I certify that I have made no alterations, amendments or other 
changes to this Coverage Gap Discount Program Agreement.

By:--------------------------------------------------------------------

(please print name)
-----------------------------------------------------------------------

(signature)
Title:-----------------------------------------------------------------

Name of Manufacturer:--------------------------------------------------

Manufacturer's Mailing Address:----------------------------------------

Manufacturer's E-mail Address:-----------------------------------------

Manufacturer labeler Code(s):------------------------------------------

Date:------------------------------------------------------------------


    Authority:  Section 3301 of the Patient Protection Affordable 
Care Act and section 1101 of the Health Care and Education 
Reconciliation Act of 2010 (Sections 1860D-43 and 1860D-14A of the 
Social Security Act) Program No. 93.774, Medicare--Supplementary 
Medical Insurance Program).

    Dated: May 13, 2010.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: May 20, 2010.
Kathleen Sebelius,
Secretary.
[FR Doc. 2010-12559 Filed 5-21-10; 11:15 am]
BILLING CODE 4120-01-P