1. Draft Model Manufacturer Agreement Medicare Coverage Gap Discount Program Public Meeting June 1, 2010

2. Topics Statutory Requirements Agreement Overview Definitions Manufacturer Responsibilities Secretary Responsibilities Dispute Resolution Agreement Process 2

3. The Affordable Care Act Section 1860D-43(a): “ In order for coverage to be available under this part for covered Part D drugs (as defined in section 1860D-2(e)) of a manufacturer, the manufacturer must—” Participate in the Coverage Gap Discount Program Enter into and have in effect, an agreement with the Secretary Enter into and have in effect, a contract with a third party that has entered into a contract with the Secretary 3

4. The Affordable Care Act Section 1860D14A: “An agreement... shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer” 4

5. The Affordable Care Act Section 1860D14A: “The Secretary shall establish a model agreement for use under the program not later than 180 days after the date of enactment... in consultation with manufacturers, and allow for comment on such model agreement” 5

6. Agreement Overview Modeled After Medicaid Drug Rebate Agreement Divided into 9 sections I. DefinitionsVI. Confidentiality II. Manufacturer ResponsibilitiesVII. Nonrenewal/Termination III. Secretary ResponsibilitiesVIII. General Provisions IV. Penalty ProvisionsIX. Signatures V. Payment Amount Dispute Resolution Not subject to further revision, based on negotiations with individual manufacturers Manufacturer Agreement applies to all of a manufacturer’s applicable drugs 6

7. Definition: Applicable Beneficiary Individual, who on date of dispensing is: Enrolled in PDP or MA-PD Not enrolled in qualified retiree prescription drug plan Not entitled to low-income subsidy In the coverage gap 7

8. Definition: Applicable Drug A Part D drug— Approved under NDA or BLA AND On formulary or treated as if on formulary (e.g., provided through exception) 8

9. Definition: Applicable Discount 50 percent of the portion of the negotiated price of the applicable drug that falls within the coverage gap 9

10. Definition: Medicare Part D Discount Information Information provided by CMS to Manufacturers Specifies total units and total applicable discount for each NDC for applicable calendar quarter Derived from PDE data elements Collect PDE information for monitoring and tracking provision of discounts by Part D sponsors 10

11. Manufacturer Responsibilities Reimburse applicable discount for all applicable discounts provided by Part D sponsors for all applicable drugs, based on PDE information reported to CMS by Part D sponsors Pay each Part D sponsor within 14 days of being invoiced by the TPA Electronically list and maintain an up-to-date electronic FDA registration and listing of all NDCs Enter into, and have in effect, contract with the TPA Collect and have available appropriate data for not less than 10 years 11

12. Secretary Responsibilities Require Part D sponsors to make applicable discounts available at point-of-sale Make public the list of manufacturer labeler codes that are subject to Discount Agreement 12

13. Secretary Responsibilities Contract with a third party (i.e., TPA) to: Receive and transmit information between CMS, manufacturers and Plans Facilitate distribution of manufacturer funds to Part D sponsors Provide timely information to manufacturers, as necessary, for manufacturer to fulfill obligations under the Agreement Permit period audits of information used to determine discounts 13

14. Payment Amount Dispute Resolution Manufacturer must provide written notice of disputed information within 60 days of receipt 1 st Level—TPA and manufacturer use best efforts to resolve the dispute 2 nd Level—If dispute is unresolved, Independent Review Entity will review and make determination within 120 days of receipt 3 rd Level—If dispute is still unresolved, manufacturer may request review by CMS Administrator. The decision by Administrator is final and binding 14

15. 2011 Agreement Process— Next Steps 1. Manufacturer contact information: Manufacturer Legal Entity Name Manufacturer DUNS Number Manufacturer Mailing Address Contact Person(s) Name Contact Person(s)Title/Position Contact Person(s) phone number(s) Contact Person(s) email address(es) Name of Individual who will sign the Agreement Title of Individual who will sign the Agreement 15

16. 2011 Agreement Process— Next Steps Submit information using Excel template located at http://www.cms.gov/PrescriptionDrugCovGenIn/05_Ph arma.asp#TopOfPage Submit completed Excel spreadsheet to CGDP&manufacturers@cms.hhs.gov 16

17. 2011 Agreement Process— Next Steps 2.Final Model Agreement Comments on draft due June 21, 2010 CMS expects to post final Model Agreement in July on CMS website at: http://www.cms.gov/PrescriptionDrugCo vGenIn/05_Pharma.asp#TopOfPage http://www.cms.gov/PrescriptionDrugCo vGenIn/05_Pharma.asp#TopOfPage CMS also will distribute final Model Agreement to Manufacturers on contact list 17

18. 2011 Agreement Process —Next Steps 3.Collecting signed Agreements Manufacturers must sign no later than 30 days after CMS specifies the date of establishment for final Model Agreement CMS plans to electronically collect signed Agreements and labeler codes CMS plans to use an Excel spreadsheet to collect the labeler codes for each manufacturer 18