REFUND Act of 2021

II 117TH CONGRESS 1ST SESSION S. 1287 To amend title XVIII of the Social Security Act to require manufacturers of certain single-dose vial drugs payable under part B of the Medicare program to provide refunds with respect to amounts of such drugs discarded, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 21, 2021 Mr. DURBIN (for himself and Mr. PORTMAN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XVIII of the Social Security Act to require manufacturers of certain single-dose vial drugs payable under part B of the Medicare program to provide refunds with respect to amounts of such drugs discarded, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Recovering Excessive 4 Funds for Unused and Needless Drugs Act of 2021’’ or 5 the ‘‘REFUND Act of 2021’’. 6 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1287 IS SEC. 2. REQUIRING MANUFACTURERS OF CERTAIN SINGLE- 1 DOSE CONTAINER OR SINGLE-USE PACKAGE 2 DRUGS PAYABLE UNDER PART B OF THE 3 MEDICARE PROGRAM TO PROVIDE REFUNDS 4 WITH RESPECT TO DISCARDED AMOUNTS OF 5 SUCH DRUGS. 6 Section 1847A of the Social Security Act (42 U.S.C. 7 1395–3a), as amended by section 405 of division CC of 8 the Consolidated Appropriations Act, 2021, is amended— 9 (1) by redesignating subsection (h) as sub- 10 section (i); and 11 (2) inserting after subsection (g) the following: 12 ‘‘(h) REFUND FOR CERTAIN DISCARDED SINGLE- 13 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUGS.— 14 ‘‘(1) SECRETARIAL PROVISION OF INFORMA- 15 TION.— 16 ‘‘(A) IN GENERAL.—For each calendar 17 quarter beginning on or after January 1, 2022, 18 the Secretary shall, with respect to a refundable 19 single-dose container or single-use package drug 20 (as defined in paragraph (8)), report to each 21 manufacturer (as defined in subsection 22 (c)(6)(A)) of such refundable single-dose con- 23 tainer or single-use package drug the following 24 for the calendar quarter: 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1287 IS ‘‘(i) Subject to subparagraph (C), in- 1 formation on the total number of units of 2 the billing and payment code of such drug, 3 if any, that were discarded during such 4 quarter, as determined using a mechanism 5 such as the JW modifier used as of the 6 date of enactment of this subsection (or 7 any such successor modifier that includes 8 such data as determined appropriate by 9 the Secretary). 10 ‘‘(ii) The refund amount that the 11 manufacturer is liable for pursuant to 12 paragraph (3). 13 ‘‘(B) DETERMINATION OF DISCARDED 14 AMOUNTS.—For purposes of subparagraph 15 (A)(i), with respect to a refundable single-dose 16 container or single-use package drug furnished 17 during a quarter, the amount of such drug that 18 was discarded shall be determined based on the 19 amount of such drug that was unused and dis- 20 carded for each drug on the date of service. 21 ‘‘(C) EXCLUSION OF UNITS OF PACKAGED 22 DRUGS.—The total number of units of the bill- 23 ing and payment code of a refundable single- 24 dose container or single-use package drug of a 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1287 IS manufacturer furnished during a calendar quar- 1 ter for purposes of subparagraph (A)(i) shall 2 not include such units that are packaged into 3 the payment amount for an item or service and 4 are not separately payable. 5 ‘‘(2) MANUFACTURER REQUIREMENT.—For 6 each calendar quarter beginning on or after January 7 1, 2022, the manufacturer of a refundable single- 8 dose container or single-use package drug shall, for 9 such drug, provide to the Secretary a refund that is 10 equal to the amount specified in paragraph (3) for 11 such drug for such quarter. 12 ‘‘(3) REFUND AMOUNT.— 13 ‘‘(A) IN GENERAL.—The amount of the re- 14 fund specified in this paragraph is, with respect 15 to a refundable single-dose container or single- 16 use package drug of a manufacturer assigned to 17 a billing and payment code for a calendar quar- 18 ter beginning on or after January 1, 2022, an 19 amount equal to 90 percent (or, in the case of 20 a refundable single-dose container or single-use 21 package drug described in subclause (I) or (II) 22 of subparagraph (B)(ii), the percent determined 23 for such drug under subparagraph (B)(i)) of 24 the product of— 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1287 IS ‘‘(i) the total number of units of the 1 billing and payment code for such drug 2 that were discarded during such quarter 3 (as determined under paragraph (1)); and 4 ‘‘(ii)(I) in the case of a refundable 5 single-dose container or single-use package 6 drug that is a single source drug or bio- 7 logical, the amount determined for such 8 drug under subsection (b)(4); or 9 ‘‘(II) in the case of a refundable sin- 10 gle-dose container or single-use package 11 drug that is a biosimilar biological product, 12 the average sales price determined under 13 subsection (b)(8)(A). 14 ‘‘(B) TREATMENT OF DRUGS THAT RE- 15 QUIRE FILTRATION OR OTHER UNIQUE CIR- 16 CUMSTANCES.— 17 ‘‘(i) IN GENERAL.—The Secretary, 18 through notice and comment rulemaking— 19 ‘‘(I) in the case of a refundable 20 single-dose container or single-use 21 package drug described in subclause 22 (I) of clause (ii), shall adjust the per- 23 centage otherwise applicable for pur- 24 poses of determining the refund 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1287 IS amount with respect to such drug 1 under subparagraph (A) as deter- 2 mined appropriate by the Secretary; 3 and 4 ‘‘(II) in the case of a refundable 5 single-dose container or single-use 6 package drug described in subclause 7 (II) of clause (ii), may adjust the per- 8 centage otherwise applicable for pur- 9 poses of determining the refund 10 amount with respect to such drug 11 under subparagraph (A) as deter- 12 mined appropriate by the Secretary. 13 ‘‘(ii) DRUG DESCRIBED.—For pur- 14 poses of clause (i), a refundable single-dose 15 container or single-use package drug de- 16 scribed in this clause is either of the fol- 17 lowing: 18 ‘‘(I) A refundable single-dose 19 container or single-use package drug 20 for which preparation instructions re- 21 quired and approved by the Commis- 22 sioner of the Food and Drug Adminis- 23 tration include filtration during the 24 drug preparation process, prior to di- 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1287 IS lution and administration, and require 1 that any unused portion of such drug 2 after the filtration process be dis- 3 carded after the completion of such 4 filtration process. 5 ‘‘(II) Any other refundable sin- 6 gle-dose container or single-use pack- 7 age drug that has unique cir- 8 cumstances involving similar loss of 9 product. 10 ‘‘(4) FREQUENCY.—Amounts required to be re- 11 funded pursuant to paragraph (2) shall be paid in 12 regular intervals (as determined appropriate by the 13 Secretary). 14 ‘‘(5) REFUND DEPOSITS.—Amounts paid as re- 15 funds pursuant to paragraph (2) shall be deposited 16 into the Federal Supplementary Medical Insurance 17 Trust Fund established under section 1841. 18 ‘‘(6) ENFORCEMENT.— 19 ‘‘(A) AUDITS.— 20 ‘‘(i) MANUFACTURER AUDITS.—Each 21 manufacturer of a refundable single-dose 22 container or single-use package drug that 23 is required to provide a refund under this 24 subsection shall be subject to periodic 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1287 IS audit with respect to such drug and such 1 refunds by the Secretary. 2 ‘‘(ii) PROVIDER AUDITS.—The Sec- 3 retary shall conduct periodic audits of 4 claims submitted under this part with re- 5 spect to refundable single-dose container or 6 single-use package drugs in accordance 7 with the authority under section 1833(e) to 8 ensure compliance with the requirements 9 applicable under this subsection. 10 ‘‘(B) CIVIL MONEY PENALTY.— 11 ‘‘(i) IN GENERAL.—The Secretary 12 shall impose a civil money penalty on a 13 manufacturer of a refundable single-dose 14 container or single-use package drug who 15 has failed to comply with the requirement 16 under paragraph (2) for such drug for a 17 calendar quarter in an amount equal to the 18 sum of— 19 ‘‘(I) the amount that the manu- 20 facturer would have paid under such 21 paragraph with respect to such drug 22 for such quarter; and 23 ‘‘(II) 25 percent of such amount. 24 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1287 IS ‘‘(ii) APPLICATION.—The provisions 1 of section 1128A (other than subsections 2 (a) and (b)) shall apply to a civil money 3 penalty under this subparagraph in the 4 same manner as such provisions apply to a 5 penalty or proceeding under section 6 1128A(a). 7 ‘‘(7) IMPLEMENTATION.—The Secretary shall 8 implement this subsection through notice and com- 9 ment rulemaking. 10 ‘‘(8) DEFINITION OF REFUNDABLE SINGLE- 11 DOSE CONTAINER OR SINGLE-USE PACKAGE DRUG.— 12 ‘‘(A) IN GENERAL.—Except as provided in 13 subparagraph (B), in this subsection, the term 14 ‘refundable single-dose container or single-use 15 package drug’ means a single source drug or bi- 16 ological (as defined in section 1847A(c)(6)(D)) 17 or a biosimilar biological product (as defined in 18 section 1847A(c)(6)(H)) for which payment is 19 established under this part and that is fur- 20 nished from a single-dose container or single- 21 use package. 22 ‘‘(B) EXCLUSIONS.—The term ‘refundable 23 single-dose container or single-use package 24 drug’ does not include a drug or biological that 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1287 IS is either a radiopharmaceutical or an imaging 1 agent. 2 ‘‘(9) REPORT TO CONGRESS.— 3 ‘‘(A) IN GENERAL.—Not later than 3 years 4 after the date of enactment of this subsection, 5 the Office of the Inspector General of the De- 6 partment of Health and Human Services, in 7 consultation with the Centers for Medicare & 8 Medicaid Services and the Food and Drug Ad- 9 ministration, shall submit to the Committee on 10 Energy and Commerce and the Committee on 11 Ways and Means of the House of Representa- 12 tives and the Committee on Finance of the Sen- 13 ate, a report on any impact this subsection is 14 demonstrated to have on— 15 ‘‘(i) the licensure, market entry, mar- 16 ket retention, or marketing of biosimilar 17 biological products; and 18 ‘‘(ii) vial size changes, label adjust- 19 ments, or technological developments. 20 ‘‘(B) UPDATES.—At the direction of the 21 Committees referred to in subparagraph (A), 22 the Office of the Inspector General of the De- 23 partment of Health and Human Services, in 24 consultation with the Centers for Medicare & 25 VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1287 IS Medicaid Services and the Food and Drug Ad- 1 ministration, shall periodically update the re- 2 port under such subparagraph.’’. 3 Æ VerDate Sep 11 2014 04:45 May 19, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S1287.IS S1287 kjohnson on DSK79L0C42PROD with BILLS