Federal regulations · Through 2026-08-25 · Newer source version available

42 CFR 423.2716: Phase-in of applicable discount for certain manufacturers.

(a) Specified manufacturer. Subject to the limitation with respect to manufacturer acquisitions described at § 423.2724, a specified manufacturer is a manufacturer of an applicable drug that, in 2021, had—
(1) A Coverage Gap Discount Program agreement, as described at § 423.2315, in effect in accordance with § 423.2720(a)(1);
(2) Total expenditures for all of its specified drugs (as defined in § 423.2704) covered by a Coverage Gap Discount Program agreement for 2021 and covered under Part D in 2021 represented less than 1.0 percent of total expenditures for all Part D drugs in 2021; and
(3) Total expenditures for all of its specified drugs that are single source drugs and biological products for which payment may be made under Part B in 2021 represented less than 1.0 percent of the total expenditures under Part B for all drugs or biological products in 2021.
(b) Specified small manufacturer. Subject to the limitation with respect to manufacturer acquisition described at § 423.2724, a specified small manufacturer is a manufacturer of an applicable drug that, in 2021—
(1) Is a specified manufacturer as described in paragraph (a) of this section; and
(2) The total expenditures under Part D for any one of its specified small manufacturer drugs covered under a Coverage Gap Discount Program agreement for 2021 and covered under Part D in 2021 are equal to or greater than 80 percent of the total expenditures for all its specified small manufacturer drugs covered under Part D in 2021.
(c) Aggregation rule. All entities, including corporations, partnerships, proprietorships, and other entities treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 are treated as one manufacturer for purposes of this section.

Where this section sits in the code

Title 42—Public Health
CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUBCHAPTER B—MEDICARE PROGRAM
PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT
Subpart AA—Medicare Part D Manufacturer Discount Program

(1) A Coverage Gap Discount Program agreement, as described at § 423.2315, in effect in accordance with § 423.2720(a)(1);

(2) Total expenditures for all of its specified drugs (as defined in § 423.2704) covered by a Coverage Gap Discount Program agreement for 2021 and covered under Part D in 2021 represented less than 1.0 percent of total expenditures for all Part D drugs in 2021; and

(3) Total expenditures for all of its specified drugs that are single source drugs and biological products for which payment may be made under Part B in 2021 represented less than 1.0 percent of the total expenditures under Part B for all drugs or biological products in 2021.

(b) Specified small manufacturer. Subject to the limitation with respect to manufacturer acquisition described at § 423.2724, a specified small manufacturer is a manufacturer of an applicable drug that, in 2021—

(1) Is a specified manufacturer as described in paragraph (a) of this section; and

(2) The total expenditures under Part D for any one of its specified small manufacturer drugs covered under a Coverage Gap Discount Program agreement for 2021 and covered under Part D in 2021 are equal to or greater than 80 percent of the total expenditures for all its specified small manufacturer drugs covered under Part D in 2021.

(c) Aggregation rule. All entities, including corporations, partnerships, proprietorships, and other entities treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 are treated as one manufacturer for purposes of this section.

Collected 2026-08-27T02:26:11Z. Source file · JSON

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