Section 11201 of the Inflation Reduction Act of 2022 (IRA), eliminates the coverage gap phase of the Part D benefit and sunsets the coverage gap discount program after December 31, 2024, and amends the Social Security Act (the Act) to add §1860D-14C, requiring the Secretary to establish a new Medicare Part D manufacturer discount program (Discount Program) beginning January 1, 2025.
Under the Discount Program, participating manufacturers are required to provide discounts on their âapplicable drugsâ (brand drugs, biologics, and biosimilars) both in the initial coverage phase and in the catastrophic coverage phase of the Part D benefit. Section 1860D-14C(d)(1) of the Act requires CMS to implement and administer the Discount Program, including determining discounted amounts, and ensuring that discounts are applied appropriately and payments/reimbursements are timely made. As with the existing coverage gap discount program, a CMS contractor will serve as the third party administrator (TPA) and facilitate payment processing.
Information in this collection is needed to set up agreements between manufacturers and CMS, as required under §1860D-14C(a) of the Act. Such agreements are required in order for manufacturers to participate in the Discount Program and, under §1860D43(a), for their applicable drugs to be covered under Part D beginning in 2025. Information that will be collected from manufacturers in the Health Plan Management System (HPMS) (Appendix A) is needed to create and execute Discount Program agreements and to determine which manufacturers qualify as a specified manufacturer or specified small manufacturer for phased-in discounts, as described at §1860D-14C(g)(4). Banking information collected by the TPA from manufacturers and plan sponsors (Appendix B) is needed to prepare invoices and process financial transactions (deposits and payments) through the automated clearing house (ACH).
Burden has decreased due to the removal of the one-time burden associated with program implementation, which took place in 2024. CMS is using an annual burden going forward based on the estimated number (40) of manufacturers that will newly join the Discount Program each year, and the number of new Part D plan contracts that are established each year.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.