On August 1, 2021, the Senate released the legislative text of the bipartisan infrastructure bill, the “Infrastructure Investment and Jobs Act,” H.R. 3684.  The Senate is expected to vote this week, before a month-long recess beginning on August 9, 2021.  The 2,702 page legislation contains several relevant health care-related provisions, including a delay of the implementation of the rule eliminating the Anti-Kickback Statute (“AKS”) safe harbor protection for Medicare Part D rebates.

Rebate for Discarded Amounts of Medicare Part B Single-Dose Container or Single-Use Package Drugs

First, the legislation requires manufacturers of single-dose container or single-use package drugs payable under Medicare Part B to provide a rebate to the government for any discarded portion of that drug.  The rebates will be charged each quarter, beginning with the first quarter of 2023, and must be paid in regular intervals, as determined appropriate by the Secretary of the U.S. Department of Health and Human Services (“HHS”).  The legislation provides that, in order to enforce this provision, HHS will conduct periodic audits of both drug manufacturers and providers who submit claims.  For violations of this provision, HHS will impose Civil Monetary Penalties in amounts equal to the sum of the amount that the manufacturer would have paid and twenty-five percent of such amount.

The legislation provides exclusions for: (1) radiopharmaceuticals or imaging agents; (2) Food and Drug Administration (“FDA”)-approved drugs that require filtration prior to administration; and (3) new drugs approved by the FDA on or after the date of enactment and have been paid by Medicare for less than 18 months.

Additionally, within three years of the enactment of this provision, the HHS Office of the Inspector General (“OIG”), the Centers for Medicare & Medicaid Services (“CMS”), and FDA will submit a report to Congress on any impact on the licensure, market entry, market retention, or marketing of biosimilar biological products.

Moratorium on Implementation of Rule Removing AKS Safe Harbor Protection for Prescription Drug Rebates

 Second, the legislation postpones the implementation of HHS OIG’s final rule titled, “Fraud and Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees” (85 Fed. Reg. 76,666).  Among other provisions, the final rule amends 42 C.F.R. § 1001.952(h) to remove safe harbor protection for reductions in price in connection with the sale or purchase of prescription pharmaceutical products from manufacturers to plan sponsors under Medicare Part D, either directly or through pharmacy benefit managers (“PBMs”) acting under contract with them, unless the reduction in price is required by law.  These changes were initially set to take effect on January 1, 2022, but now, under this legislation, they will not be implemented until January 1, 2026.

Make PPE in America Act

Thirdly, the legislation includes the “Make PPE in America Act,” which requires HHS to enter into long-term contracts with domestic suppliers and manufacturers for personal protective equipment (“PPE”).  However, the legislation includes some exceptions for availability, as well as for compliance with international trade agreements.  The purpose of the provision is to rebuild the domestic PPE supply chain by incentivizing domestic production of PPE, materials, and components.

Broadband Equity and Access

Lastly, the legislation sets aside $42.45 billion for the “Broadband Equity, Access, and Deployment Program.”  The legislation also sets aside $2 billion for rural broadband improvements. One purpose of these provisions is to improve access to telehealth services for rural and underserved communities.

Provider Relief Funds Not Clawed Back

Additionally, while earlier reports indicated that unspent funds from the COVID-19 Provider Relief Fund (“PRF”) would be rescinded as a pay for, the PRF funds were untouched (despite many other COVID-19 relief funds being rescinded).  In fact, two new bipartisan bills were introduced last Wednesday (H.R. 4735 and S. 2493, the “Provider Relief Fund Deadline Extension Act”), which would extend the deadline for providers to expend PRF funds until December 31, 2021, or until the end of the COVID-19 public health emergency, whichever comes later.

Reed Smith will continue to track the progress of this legislation and other relevant legislation. Should you have any questions related to this legislation, please do not hesitate to reach out to the health care attorneys at Reed Smith.